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  • How To Calculate Terminal Value

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    This document provides an overview of calculating terminal value using the perpetuity growth model and exit multiple method. It includes historical and forecasted financial data for a company, assumptions for WACC and growth rates, calculations of free cash flows to the firm, present value of explicit periods, and terminal value. This allows calculating total enterprise value, equity value, and estimated share price of $6.58.

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    Finance

    Original Title

    How to calculate Terminal Value

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    This document provides an overview of calculating terminal value using the perpetuity growth model and exit multiple method. It includes historical and forecasted financial data for a company, assumptions for WACC and growth rates, calculations of free cash flows to the firm, present value of explicit periods, and terminal value. This allows calculating total enterprise value, equity value, and estimated share price of $6.58.

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    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xls, pdf, or txt
    71 views4 pages

    How To Calculate Terminal Value

    Uploaded by

    SODDEY
    This document provides an overview of calculating terminal value using the perpetuity growth model and exit multiple method. It includes historical and forecasted financial data for a company, assumptions for WACC and growth rates, calculations of free cash flows to the firm, present value of explicit periods, and terminal value. This allows calculating total enterprise value, equity value, and estimated share price of $6.58.

    Copyright:

    © All Rights Reserved
    Download as XLS, PDF, TXT or read online from Scribd
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    of 4

    Terminal Value

    Prepared by - Dheeraj Vaidya, CFA, FRM


    email - dheeraj@wallstreetmojo.com
    websites: www.wallstreetmojo.com

    Free Cash Flow to Firm


    EBIT
    Free Cash Flow to Firm
    EBIT x (1-t)
    Add: Depreciation
    Less: Capex
    Less: Change in working capital
    FCFF
    Assumptions
    WACC
    Growth Rate

    Present Value of Explicit FCFF

    www.educorporatebridge.com

    2010
    $32

    $22
    $30
    $15

    Historical
    2011
    2012
    $38
    $48

    $27
    $30
    $30
    $7
    $20

    10%
    4%

    $161

    1) Perpetuity Growth method


    Present Value of Explicit FCFF

    $561

    2) Exit Multiple method


    Present Value of Explicit FCFF

    Share Price Calculations


    Present Value of Explicit FCFF
    Present value of Terminal Value
    Total Enterprise Value
    (-) Debt

    $547

    161
    547
    708
    100

    23%
    77%

    $34
    $30
    $30
    $6
    $27

    (+) Cash
    Equity Value
    # of Shares
    Share Price

    50
    658
    100
    $6.58

    cal

    Forecasts
    2015
    2016
    $62
    $68

    2013
    $50

    2014
    $55

    2017
    $75

    2018
    $82

    $35
    $31
    $32
    $3
    $31

    $39
    $33
    $34
    $3
    $34

    $43
    $36
    $37
    $3
    $39

    $48
    $38
    $39
    $4
    $43

    $53
    $41
    $42
    $4
    $48

    $57
    $44
    $45
    $4
    $52

    2014
    0

    2015
    0

    2016
    0

    2017
    0

    2018
    904

    2014
    0

    2015
    0

    2016
    0

    2017
    0

    2018
    881

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