Terminal Value

Travel + Leisure Co. (TNL)

$38.295

-0.82 (-2.11%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.07
Free cash flow (t + 1) 602.61
Terminal Value 14,806.18
Present Value of Terminal Value 11,027.58



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