Terminal Value

TerraVest Industries Inc. (TVK.TO)


-0.15 (-0.60%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.03
Free cash flow (t + 1) 25.48
Terminal Value 841.03
Present Value of Terminal Value 658.03

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