Terminal Value

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