Terminal Value

Marcus & Millichap, Inc. (MMI)

$40.43

+0.87 (+2.20%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.98
Free cash flow (t + 1) 344.93
Terminal Value 6,926.35
Present Value of Terminal Value 4,943.01



Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Marcus & Millichap, Inc.’s cash flows after that period (if we don’t include this, we would have to assume that Marcus & Millichap, Inc. stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.