Discounted Cash Flow (DCF) Analysis Levered

Microsoft Corporation (MSFT)

$247.49

-0.09 (-0.04%)
All numbers are in Millions, Currency in USD
Stock DCF: 250.33 | 247.49 | undervalue

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 110,360125,843143,015168,088198,270229,578.28265,830.36307,806.91356,411.86412,691.88
Revenue (%)
Operating Cash Flow 43,88452,18560,67576,74089,03598,360.04113,891.81131,876.15152,700.35176,812.85
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 32,25238,26045,23456,11865,14972,317.6183,737.0996,959.78112,270.44129,998.76

Weighted Average Cost Of Capital

Share price $ 247.49
Beta 0.920
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 8.033
Total Debt 61,270
Total Equity 1,866,074.60
Total Capital 1,927,344.60
Debt Weighting 3.18
Equity Weighting 96.82
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 110,360125,843143,015168,088198,270229,578.28265,830.36307,806.91356,411.86412,691.88
Operating Cash Flow 43,88452,18560,67576,74089,03598,360.04113,891.81131,876.15152,700.35176,812.85
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 32,25238,26045,23456,11865,14972,317.6183,737.0996,959.78112,270.44129,998.76
WACC
PV LFCF 67,041.4571,964.2077,248.4282,920.6589,009.39
SUM PV LFCF 388,184.10

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.87
Free cash flow (t + 1) 132,598.73
Terminal Value 2,258,922.18
Present Value of Terminal Value 1,546,670.76

Intrinsic Value

Enterprise Value 1,934,854.86
Net Debt 47,339
Equity Value 1,887,515.86
Shares Outstanding 7,540
Equity Value Per Share 250.33