Terminal Value

Urbana Corporation (URB.TO)


+0.04 (+1.01%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.67
Free cash flow (t + 1) 1.95
Terminal Value 41.69
Present Value of Terminal Value 30.19

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