Discounted Cash Flow (DCF) Analysis Levered

Microsoft Corporation (MSFT)

$ 257.89
0.65 (+0.25%)

Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 77,84986,83393,58085,32089,950110,360125,843143,015156,555.63171,378.28187,604.33205,366.66224,810.73
Revenue (%)
Operating Cash Flow 28,83332,23129,08033,32539,50743,88452,18560,67561,031.0166,809.4173,134.9180,059.3087,639.30
Operating Cash Flow (%)
Capital Expenditure -4,257-5,485-5,944-8,343-8,129-11,632-13,925-15,441-13,572.34-14,857.36-16,264.05-17,803.93-19,489.60
Capital Expenditure (%)
Free Cash Flow 24,57626,74623,13624,98231,37832,25238,26045,23447,458.6751,952.0556,870.8662,255.3768,149.70

Weighted Average Cost Of Capital

Share price $ 257.89
Beta 0.794
Diluted Shares Outstanding 7,683
Cost of Debt
Tax Rate 16.51
After-tax Cost of Debt 4.17%
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.782
Total Debt 63,327
Total Equity 1,981,368.87
Total Capital 2,044,695.87
Debt Weighting 3.10
Equity Weighting 96.90
Wacc

Build Up Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Actual
2021
Projected
2022
Projected
2023
Projected
2024
Projected
2025
Projected
Revenue 77,84986,83393,58085,32089,950110,360125,843143,015156,555.63171,378.28187,604.33205,366.66224,810.73
Operating Cash Flow 28,83332,23129,08033,32539,50743,88452,18560,67561,031.0166,809.4173,134.9180,059.3087,639.30
Capital Expenditure -4,257-5,485-5,944-8,343-8,129-11,632-13,925-15,441-13,572.34-14,857.36-16,264.05-17,803.93-19,489.60
Free Cash Flow 24,57626,74623,13624,98231,37832,25238,26045,23447,458.6751,952.0556,870.8662,255.3768,149.70
WACC
PV LFCF 43,684.3444,017.2844,352.7444,690.7745,031.37
SUM PV LFCF 221,776.50

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.64
Free cash flow (t + 1) 70,875.69
Terminal Value 1,527,493.23
Present Value of Terminal Value 1,009,323.79

Intrinsic Value

Enterprise Value 1,231,100.29
Net Debt 49,751
Equity Value 1,181,349.29
Shares Outstanding 7,683
Equity Value Per Share 153.76