Discounted Cash Flow (DCF) Analysis Levered
Microsoft Corporation (MSFT)
$246.13
+3.42 (+1.41%)
All numbers are in Millions, Currency in USD
Free Cash Flow
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 110,360 | 125,843 | 143,015 | 168,088 | 198,270 | 229,578.28 | 265,830.36 | 307,806.91 | 356,411.86 | 412,691.88 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 43,884 | 52,185 | 60,675 | 76,740 | 89,035 | 98,360.04 | 113,891.81 | 131,876.15 | 152,700.35 | 176,812.85 |
| Operating Cash Flow (%) | ||||||||||
| Capital Expenditure | -11,632 | -13,925 | -15,441 | -20,622 | -23,886 | -26,042.43 | -30,154.72 | -34,916.37 | -40,429.92 | -46,814.10 |
| Capital Expenditure (%) | ||||||||||
| Free Cash Flow | 32,252 | 38,260 | 45,234 | 56,118 | 65,149 | 72,317.61 | 83,737.09 | 96,959.78 | 112,270.44 | 129,998.76 |
Weighted Average Cost Of Capital
| Share price | $ 246.13 |
|---|---|
| Beta | 0.926 |
| Diluted Shares Outstanding | 7,540 |
| Cost of Debt | |
| Tax Rate | 13.11 |
| After-tax Cost of Debt | 2.93% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 7.897 |
| Total Debt | 61,270 |
| Total Equity | 1,855,820.20 |
| Total Capital | 1,917,090.20 |
| Debt Weighting | 3.20 |
| Equity Weighting | 96.80 |
| Wacc |
Build Up Free Cash Flow
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 110,360 | 125,843 | 143,015 | 168,088 | 198,270 | 229,578.28 | 265,830.36 | 307,806.91 | 356,411.86 | 412,691.88 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 43,884 | 52,185 | 60,675 | 76,740 | 89,035 | 98,360.04 | 113,891.81 | 131,876.15 | 152,700.35 | 176,812.85 |
| Capital Expenditure | -11,632 | -13,925 | -15,441 | -20,622 | -23,886 | -26,042.43 | -30,154.72 | -34,916.37 | -40,429.92 | -46,814.10 |
| Free Cash Flow | 32,252 | 38,260 | 45,234 | 56,118 | 65,149 | 72,317.61 | 83,737.09 | 96,959.78 | 112,270.44 | 129,998.76 |
| WACC | ||||||||||
| PV LFCF | 67,122.34 | 72,137.97 | 77,528.38 | 83,321.59 | 89,547.68 | |||||
| SUM PV LFCF | 389,657.96 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 7.74 |
| Free cash flow (t + 1) | 132,598.73 |
| Terminal Value | 2,310,082.44 |
| Present Value of Terminal Value | 1,591,265.41 |
Intrinsic Value
| Enterprise Value | 1,980,923.36 |
|---|---|
| Net Debt | 47,339 |
| Equity Value | 1,933,584.36 |
| Shares Outstanding | 7,540 |
| Equity Value Per Share | 256.44 |