Terminal Value
McCormick & Company, Incorporated (MKC)
$90.67
+1.04 (+1.16%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 4.63 |
| Free cash flow (t + 1) | 1,324.91 |
| Terminal Value | 50,376.69 |
| Present Value of Terminal Value | 40,174.32 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of McCormick & Company, Incorporated’s cash flows after that period (if we don’t include this, we would have to assume that McCormick & Company, Incorporated stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.