Terminal Value

3M Company (MMM)


-1.19 (-1.14%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.24
Free cash flow (t + 1) 6,056.17
Terminal Value 115,575.80
Present Value of Terminal Value 81,485.98

Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of 3M Company’s cash flows after that period (if we don’t include this, we would have to assume that 3M Company stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.