Terminal Value

Xenia Hotels & Resorts, Inc. (XHR)


-0.31 (-2.51%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 10.59
Free cash flow (t + 1) 342.35
Terminal Value 3,985.45
Present Value of Terminal Value 2,409.34

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