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.