Terminal Value

Texas Instruments Incorporated (TII.DE)

162.86 €

+0.54 (+0.33%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.95
Free cash flow (t + 1) 10,292.16
Terminal Value 172,977.42
Present Value of Terminal Value 117,998.42

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