Major Indexes

Terminal Value

National HealthCare Corporation

National HealthCare Corporation (NHC)

3.64 (+5.14%)

Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.92
Free cash flow (t + 1) 126.44
Terminal Value 13,743.85
Present Value of Terminal Value 10,809.78

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