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Terminal Value

Graham Holdings Company

Graham Holdings Company (GHC)

Consumer Cyclical

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.84
Free cash flow (t + 1) 263.25
Terminal Value 31,338.79
Present Value of Terminal Value 24,742.70



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