Terminal Value

Lockheed Martin Corp

Lockheed Martin Corp (LMT)

-5.18 (-1.33%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.27
Free cash flow (t + 1) 6,979.56
Terminal Value 132,439.42
Present Value of Terminal Value 85,018.33

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