Terminal Value

Cable One Inc.

Cable One Inc. (CABO)

Communication Services

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.98
Free cash flow (t + 1) 617.87
Terminal Value 31,205.67
Present Value of Terminal Value 23,340.70

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