Terminal Value

Source Energy Services Ltd. (SHLE.TO)

$1.26

+0.01 (+0.80%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 13.67
Free cash flow (t + 1) -67.16
Terminal Value -575.52
Present Value of Terminal Value -303.27



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