Major Indexes

Terminal Value

Akorn Inc.

Akorn Inc. (AKRX)

-0.0937 (-51.01%)

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.12
Free cash flow (t + 1) 82.54
Terminal Value 68,779.48
Present Value of Terminal Value 56,206.70

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