Terminal Value

Philip Morris International Inc. (PM)

$87.35

+0.33 (+0.38%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.91
Free cash flow (t + 1) 9,281.10
Terminal Value 237,368.29
Present Value of Terminal Value 178,130.32



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