Major Indexes

Terminal Value

Berkshire Hathaway Inc.

Berkshire Hathaway Inc. (BRKA)

1188 (+0.45%)

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.20
Free cash flow (t + 1) 51,193.00
Terminal Value 984,480.69
Present Value of Terminal Value 634,006.94

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