Terminal Value

OptimumBank Holdings, Inc. (OPHC)


-0.01 (-0.24%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.61
Free cash flow (t + 1) 17.33
Terminal Value 163.30
Present Value of Terminal Value 90.18

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