Terminal Value

Rogers Sugar Inc. (RSI.TO)


+0.01 (+0.16%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.94
Free cash flow (t + 1) 4.22
Terminal Value 143.53
Present Value of Terminal Value 112.78

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