Terminal Value

Thomson Reuters Corporation (TRI)

$114.4

+0.35 (+0.31%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.10
Free cash flow (t + 1) 16,697.19
Terminal Value 795,104.51
Present Value of Terminal Value 650,385.08



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