Terminal Value

EchoStar Corporation

EchoStar Corporation (SATS)


Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.24
Free cash flow (t + 1) 1,300.63
Terminal Value 12,701.42
Present Value of Terminal Value 6,527.72

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