Terminal Value

Markel Corporation

Markel Corporation (MKL)

Financial Services

Growth in perpetuity method:
Long-term growth rate
WACC (%) 23.00
Free cash flow (t + 1) 24,068.76
Terminal Value 126,677.67
Present Value of Terminal Value 44,996.06

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