Terminal Value

Xinyuan Real Estate Co., Ltd. (XIN)

$0.5274

-0.02 (-4.13%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 1.04
Free cash flow (t + 1) -1,271.96
Terminal Value 132,496.20
Present Value of Terminal Value 125,816.25



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