Terminal Value
T. Rowe Price Mid-Cap Growth Fund (RPTIX)
$96.3
+0.43 (+0.45%)
Growth in perpetuity method: | |
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Long-term growth rate | |
WACC (%) | - |
Free cash flow (t + 1) | - |
Terminal Value | - |
Present Value of Terminal Value | - |
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of T. Rowe Price Mid-Cap Growth Fund’s cash flows after that period (if we don’t include this, we would have to assume that T. Rowe Price Mid-Cap Growth Fund stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.