Terminal Value

Tandem Diabetes Care, Inc. (TNDM)


-1.60 (-3.80%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.63
Free cash flow (t + 1) -1,462
Terminal Value -31,576.73
Present Value of Terminal Value -22,907.10

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