Discounted Cash Flow (DCF) Analysis Levered

Microsoft Corporation (MSFT)

$414.92

-0.58 (-0.14%)
All numbers are in Millions, Currency in USD
Stock DCF: 324.15 | 414.92 | overvalue

Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 125,843143,015168,088198,270211,915241,591.26275,423.34313,993.21357,964.35408,093.14
Revenue (%)
Operating Cash Flow 52,18560,67576,74089,03587,582104,262.76118,863.56135,509.03154,485.52176,119.44
Operating Cash Flow (%)
Capital Expenditure -13,925-15,441-20,622-23,886-28,107-28,720.98-32,743.02-37,328.31-42,555.71-48,515.14
Capital Expenditure (%)
Free Cash Flow 38,26045,23456,11865,14959,47575,541.7886,120.5498,180.73111,929.81127,604.29

Weighted Average Cost Of Capital

Share price $ 414.92
Beta 0.890
Diluted Shares Outstanding 7,472
Cost of Debt
Tax Rate 18.98
After-tax Cost of Debt 3.41%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.411
Total Debt 59,965
Total Equity 3,100,282.24
Total Capital 3,160,247.24
Debt Weighting 1.90
Equity Weighting 98.10
Wacc

Build Up Free Cash Flow

Year
A/P
2019
Actual
2020
Actual
2021
Actual
2022
Actual
2023
Actual
2024
Projected
2025
Projected
2026
Projected
2027
Projected
2028
Projected
Revenue 125,843143,015168,088198,270211,915241,591.26275,423.34313,993.21357,964.35408,093.14
Operating Cash Flow 52,18560,67576,74089,03587,582104,262.76118,863.56135,509.03154,485.52176,119.44
Capital Expenditure -13,925-15,441-20,622-23,886-28,107-28,720.98-32,743.02-37,328.31-42,555.71-48,515.14
Free Cash Flow 38,26045,23456,11865,14959,47575,541.7886,120.5498,180.73111,929.81127,604.29
WACC
PV LFCF 69,739.4673,398.8877,250.3281,303.8685,570.10
SUM PV LFCF 387,262.61

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.32
Free cash flow (t + 1) 132,708.46
Terminal Value 3,071,955.17
Present Value of Terminal Value 2,060,020.86

Intrinsic Value

Enterprise Value 2,447,283.47
Net Debt 25,261
Equity Value 2,422,022.47
Shares Outstanding 7,472
Equity Value Per Share 324.15