Terminal Value
Noodles & Company (NDLS)
$3.42
+0.02 (+0.59%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 4.59 |
| Free cash flow (t + 1) | 2.21 |
| Terminal Value | 85.27 |
| Present Value of Terminal Value | 68.13 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of Noodles & Company’s cash flows after that period (if we don’t include this, we would have to assume that Noodles & Company stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.