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 Direxion Daily Small Cap Bull 3X Shares’s cash flows after that period (if we don’t include this, we would have to assume that Direxion Daily Small Cap Bull 3X Shares stopped operating at the end of the five-year forecast period). To do so, we’ll determine the company’s terminal value.