Terminal Value

Mettler-Toledo International Inc.

Mettler-Toledo International Inc. (MTD)


Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.70
Free cash flow (t + 1) 624.35
Terminal Value 7,176.42
Present Value of Terminal Value 3,947.19

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