Terminal Value

Walgreens Boots Alliance, Inc. (WBA)

$38.22

-0.02 (-0.05%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.24
Free cash flow (t + 1) 5,386.37
Terminal Value 240,463.05
Present Value of Terminal Value 195,378.30



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