Terminal Value

Smith & Wesson Brands, Inc. (SWBI)


-0.06 (-0.58%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.46
Free cash flow (t + 1) 178.52
Terminal Value 3,269.58
Present Value of Terminal Value 2,281.70

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