Terminal Value

Simon Property Group, Inc. (SPG-PJ)


+0.80 (+1.39%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.14
Free cash flow (t + 1) 3,089.12
Terminal Value 50,311.45
Present Value of Terminal Value 34,020.05

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