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Terminal Value

Boston Beer Company Inc. (The)

Boston Beer Company Inc. (The) (SAM)

Consumer Defensive

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.63
Free cash flow (t + 1) 237.40
Terminal Value 9,026.72
Present Value of Terminal Value 6,548.37



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