Terminal Value

T-Mobile US, Inc. (TMUS)

$ 106.72
-2.09 (-1.92%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 3.61
Free cash flow (t + 1) 10,873.67
Terminal Value 543,683.32
Present Value of Terminal Value 455,341.92

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