Terminal Value

BlackRock MuniHoldings Quality Fund... (MUE)

$11.75

-0.01 (-0.06%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.20
Free cash flow (t + 1) 4,355.64
Terminal Value 136,113.67
Present Value of Terminal Value 105,638.70



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