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Discounted Cash Flow (DCF) Analysis Levered


Microsoft Corporation

Microsoft Corporation (MSFT)

Technology

Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 77,849.0086,832.7793,579.6891,155.9796,570.63110,360.92125,844.55136,528.76148,120.05160,695.44174,338.48
Revenue (%)
Operating Cash Flow 28,835.2732,501.5129,664.7633,326.6239,507.0543,879.5052,187.7451,662.4856,048.6360,807.1665,969.68
Operating Cash Flow (%)
Capital Expenditure -4,258.34-5,487.83-5,942.31-8,340.77-8,131.25-11,632.04-13,930.99-11,181.71-12,131.03-13,160.96-14,278.32
Capital Expenditure (%)
Free Cash Flow 24,576.9327,013.6823,722.4524,985.8531,375.8032,247.4638,256.7440,480.7843,917.5947,646.2051,691.36

Weighted Average Cost Of Capital

Share price $ 139.76
Diluted Shares Outstanding 7,673.00
Cost of Debt
Tax Rate 10.18
After-tax Cost of Debt -0.46
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.14
Total Debt 72,850.00
Total Equity 1,072,378.48
Total Capital 1,145,228.48
Debt Weighting 6.36
Equity Weighting 93.64
Wacc

Build Up Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Actual
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 77,849.0086,832.7793,579.6891,155.9796,570.63110,360.92125,844.55136,528.76148,120.05160,695.44174,338.48
Operating Cash Flow 28,835.2732,501.5129,664.7633,326.6239,507.0543,879.5052,187.7451,662.4856,048.6360,807.1665,969.68
Capital Expenditure -4,258.34-5,487.83-5,942.31-8,340.77-8,131.25-11,632.04-13,930.99-11,181.71-12,131.03-13,160.96-14,278.32
Free Cash Flow 24,576.9327,013.6823,722.4524,985.8531,375.8032,247.4638,256.7440,480.7843,917.5947,646.2051,691.36
WACC
PV LFCF 32,467.8531,546.1030,650.5129,780.35
SUM PV LFCF 193,390.58

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 11.66
Free cash flow (t + 1) 53,868.12
Terminal Value 703,239.13
Present Value of Terminal Value 405,149.13

Intrinsic Value

Enterprise Value 602,085.78
Net Debt -60,973.10
Equity Value 663,058.88
Shares Outstanding 7,673.00
Equity Value Per Share 85.85