Terminal Value

Washington Prime Group Inc. (WPG)

$ 2.9
0.13 (+4.69%)
Growth in perpetuity method:
Long-term growth rate
WACC (%) 4.34
Free cash flow (t + 1) 308.67
Terminal Value 90,784.01
Present Value of Terminal Value 73,410

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