FlexShares iBoxx 3-Year Target Dura... (TDTT)
|Growth in perpetuity method:|
|Long-term growth rate|
|Free cash flow (t + 1)||-|
|Present Value of Terminal Value||-|
Now that we’ve estimated the free cash flow generated over the five-year forecast period, we need to estimate the value of FlexShares iBoxx 3-Year Target Duration TIPS Index Fund’s cash flows after that period (if we don’t include this, we would have to assume that FlexShares iBoxx 3-Year Target Duration TIPS Index Fund stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.