Terminal Value

Western Forest Products Inc. (WEF.TO)


-0.02 (-1.43%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.29
Free cash flow (t + 1) 79.36
Terminal Value 771.24
Present Value of Terminal Value 432

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