Terminal Value
The Bank of N.T. Butterfield & Son ... (NTB)
$31.19
+0.55 (+1.80%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 10.50 |
| Free cash flow (t + 1) | 269.11 |
| Terminal Value | 3,166.02 |
| Present Value of Terminal Value | 1,921.77 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of The Bank of N.T. Butterfield & Son Limited’s cash flows after that period (if we don’t include this, we would have to assume that The Bank of N.T. Butterfield & Son Limited stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.