Terminal Value

Raven Industries Inc.

Raven Industries Inc. (RAVN)

0.11 (+0.46%)

Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.05
Free cash flow (t + 1) 61.33
Terminal Value 610.22
Present Value of Terminal Value 316.23

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