Terminal Value

Annaly Capital Management, Inc. (NLY)


+0.02 (+0.10%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.41
Free cash flow (t + 1) -291.19
Terminal Value -6,602.88
Present Value of Terminal Value -4,839.73

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