Terminal Value

McCormick & Company, Incorporated (MKC)


+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.