Terminal Value
PIMCO Corporate & Income Opportunit... (PTY)
$12.25
-0.01 (-0.08%)
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 5.04 |
| Free cash flow (t + 1) | 131.27 |
| Terminal Value | 4,317.98 |
| Present Value of Terminal Value | 3,376.81 |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of PIMCO Corporate & Income Opportunity Fund’s cash flows after that period (if we don’t include this, we would have to assume that PIMCO Corporate & Income Opportunity Fund stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.