Discounted Cash Flow (DCF) Analysis Levered

Microsoft Corporation (MSFT)

$ 329.68
-8.23 (-2.44%)
Stock DCF: 2,627.51 | 329.68 | undervalue

Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 89,950110,360125,843143,015168,088196,619.77229,994.61269,034.60314,701.36368,119.73
Revenue (%)
Operating Cash Flow 39,50743,88452,18560,67576,74083,852.0898,085.38114,734.70134,210.12156,991.35
Operating Cash Flow (%)
Capital Expenditure -8,129-11,632-13,925-15,441-20,622-21,120.11-24,705.11-28,898.63-33,803.97-39,541.96
Capital Expenditure (%)
Free Cash Flow 31,37832,25238,26045,23456,11862,731.9673,380.2885,836.07100,406.15117,449.40

Weighted Average Cost Of Capital

Share price $ 329.68
Beta 0.862
Diluted Shares Outstanding 7,608
Cost of Debt
Tax Rate 13.83
After-tax Cost of Debt 2.98%
Risk-Free Rate
Market Risk Premium
Cost of Equity 5.552
Total Debt 67,775
Total Equity 2,508,205.44
Total Capital 2,575,980.44
Debt Weighting 2.63
Equity Weighting 97.37
Wacc

Build Up Free Cash Flow

Year
A/P
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Actual
2022
Projected
2023
Projected
2024
Projected
2025
Projected
2026
Projected
Revenue 89,950110,360125,843143,015168,088196,619.77229,994.61269,034.60314,701.36368,119.73
Operating Cash Flow 39,50743,88452,18560,67576,74083,852.0898,085.38114,734.70134,210.12156,991.35
Capital Expenditure -8,129-11,632-13,925-15,441-20,622-21,120.11-24,705.11-28,898.63-33,803.97-39,541.96
Free Cash Flow 31,37832,25238,26045,23456,11862,731.9673,380.2885,836.07100,406.15117,449.40
WACC
PV LFCF 59,472.8565,953.6973,140.7681,111.0189,949.80
SUM PV LFCF 369,628.11

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 5.48
Free cash flow (t + 1) 123,321.87
Terminal Value 25,692,055.23
Present Value of Terminal Value 19,676,517.74

Intrinsic Value

Enterprise Value 20,046,145.85
Net Debt 56,027
Equity Value 19,990,118.85
Shares Outstanding 7,608
Equity Value Per Share 2,627.51