Terminal Value

Summit Industrial Income REIT (SMU-UN.TO)

$17.48

+0.37 (+2.16%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.56
Free cash flow (t + 1) 2,736.76
Terminal Value 60,016.63
Present Value of Terminal Value 43,681.80



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