Discounted Cash Flow (DCF) Analysis Levered
Microsoft Corporation (MSFT)
$255.17
-5.48 (-2.10%)
All numbers are in Millions, Currency in USD
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 | 89,950 | 110,360 | 125,843 | 143,015 | 168,088 | 196,619.77 | 229,994.61 | 269,034.60 | 314,701.36 | 368,119.73 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 39,507 | 43,884 | 52,185 | 60,675 | 76,740 | 83,852.08 | 98,085.38 | 114,734.70 | 134,210.12 | 156,991.35 |
| 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 | 31,378 | 32,252 | 38,260 | 45,234 | 56,118 | 62,731.96 | 73,380.28 | 85,836.07 | 100,406.15 | 117,449.40 |
Weighted Average Cost Of Capital
| Share price | $ 255.17 |
|---|---|
| Beta | 0.936 |
| 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 | 7.148 |
| Total Debt | 67,775 |
| Total Equity | 1,941,333.36 |
| Total Capital | 2,009,108.36 |
| Debt Weighting | 3.37 |
| Equity Weighting | 96.63 |
| 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 | 89,950 | 110,360 | 125,843 | 143,015 | 168,088 | 196,619.77 | 229,994.61 | 269,034.60 | 314,701.36 | 368,119.73 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 39,507 | 43,884 | 52,185 | 60,675 | 76,740 | 83,852.08 | 98,085.38 | 114,734.70 | 134,210.12 | 156,991.35 |
| 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 | 31,378 | 32,252 | 38,260 | 45,234 | 56,118 | 62,731.96 | 73,380.28 | 85,836.07 | 100,406.15 | 117,449.40 |
| WACC | ||||||||||
| PV LFCF | 54,782.29 | 59,883.37 | 65,459.45 | 71,554.75 | 78,217.62 | |||||
| SUM PV LFCF | 353,023.30 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 7.01 |
| Free cash flow (t + 1) | 119,798.38 |
| Terminal Value | 2,391,185.29 |
| Present Value of Terminal Value | 1,704,085.62 |
Intrinsic Value
| Enterprise Value | 2,057,108.92 |
|---|---|
| Net Debt | 56,027 |
| Equity Value | 2,001,081.92 |
| Shares Outstanding | 7,608 |
| Equity Value Per Share | 263.02 |