Terminal Value

TimkenSteel Corporation (TMST)

$14.99

-0.22 (-1.45%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.14
Free cash flow (t + 1) 37.95
Terminal Value 374.29
Present Value of Terminal Value 211.06



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