The Toronto-Dominion Bank (TD)
|Growth in perpetuity method:|
|Long-term growth rate|
|Free cash flow (t + 1)||30,970.47|
|Present Value of Terminal Value||313,108.46|
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of The Toronto-Dominion Bank’s cash flows after that period (if we don’t include this, we would have to assume that The Toronto-Dominion Bank stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.