Terminal Value

Napco Security Technologies, Inc. (NSSC)


-0.21 (-0.72%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.65
Free cash flow (t + 1) 14.99
Terminal Value 196
Present Value of Terminal Value 123.65

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