Discounted Cash Flow (DCF) Analysis Levered

Free Cash Flow Microsoft C

Year A / P	2012 Actual	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected
Revenue	77,849	86,833	93,580	85,320	89,950	93,548	97,290	101,182	105,229	109,438
Revenue (%)
OperatingCashFlow	28,833	32,231	29,080	33,325	39,507	35,174	36,581	38,044	39,566	41,149
OperatingCashFlow (%)
CapitalExpenditure	-4,257	-5,485	-5,944	-8,343	-8,129	-6,923	-7,199	-7,487	-7,787	-8,098
CapitalExpenditure (%)
FreeCashFlow	24,576	26,746	23,136	24,982	31,378	28,251	29,382	30,557	31,779	33,050

Year A / P	2012 Actual	2013 Actual	2014 Actual	2015 Actual	2016 Actual
Revenue	77,849	86,833	93,580	85,320	89,950
Revenue (%)
OperatingCashFlow	28,833	32,231	29,080	33,325	39,507
OperatingCashFlow (%)
CapitalExpenditure	-4,257	-5,485	-5,944	-8,343	-8,129
CapitalExpenditure (%)
FreeCashFlow	24,576	26,746	23,136	24,982	31,378

Year A / P	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected
Revenue	93,548	97,290	101,182	105,229	109,438
Revenue (%)
OperatingCashFlow	35,174	36,581	38,044	39,566	41,149
OperatingCashFlow (%)
CapitalExpenditure	-6,923	-7,199	-7,487	-7,787	-8,098
CapitalExpenditure (%)
FreeCashFlow	28,251	29,382	30,557	31,779	33,050

Weighted Average Cost Of Capital Microsoft C

Share Price	$ 105
Diluted Shares Outstanding	8254
Cost of Debt
Tax Rate	8.4
After-tax Cost of Debt	4.0
Risk Free Rate
Market Risk Premium
Cost of Equity	11.11
Total Debt	76,073.00
Total Equity	822,360.00
Total Capital	898,433.00
Debt Weighting	8.47
Equity Weighting	91.53
Wacc

Build Up Free Cash Flow Microsoft C

Year A / P	2012 Actual	2013 Actual	2014 Actual	2015 Actual	2016 Actual	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected
Revenue	77,849	86,833	93,580	85,320	89,950	93,548	97,290	101,182	105,229	109,438
OperatingCashFlow	28,833	32,231	29,080	33,325	39,507	35,174	36,581	38,044	39,566	41,149
CapitalExpenditure	-4,257	-5,485	-5,944	-8,343	-8,129	-6,923	-7,199	-7,487	-7,787	-8,098
FreeCashFlowFreeCashFlow	24,576	26,746	23,136	24,982	31,378	28,251	29,382	30,557	31,779	33,050
WACC
PV LFCF						25,544	24,020	22,586	21,238	19,971
SUM PV LFCF										113,359

Year A / P	2012 Actual	2013 Actual	2014 Actual	2015 Actual	2016 Actual
Revenue	77,849	86,833	93,580	85,320	89,950
OperatingCashFlow	28,833	32,231	29,080	33,325	39,507
CapitalExpenditure	-4,257	-5,485	-5,944	-8,343	-8,129
FreeCashFlowFreeCashFlow	24,576	26,746	23,136	24,982	31,378
WACC
PV LFCF
SUM PV LFCF

Year A / P	2017 Projected	2018 Projected	2019 Projected	2020 Projected	2021 Projected
Revenue	93,548	97,290	101,182	105,229	109,438
OperatingCashFlow	35,174	36,581	38,044	39,566	41,149
CapitalExpenditure	-6,923	-7,199	-7,487	-7,787	-8,098
FreeCashFlowFreeCashFlow	28,251	29,382	30,557	31,779	33,050
WACC
PV LFCF	25,544	24,020	22,586	21,238	19,971
SUM PV LFCF					113,359

Terminal Value Microsoft C

Growth in perpetuity method:
Long term growth rate
WACC (%)	10.6
Free cash flow (t+1)	34,372.26
Terminal Value	520,791.89
Present Value of Terminal Value	314,694.08

Intrinsic Value Microsoft C

Enterprise Value	428,053
Net Debt	-56,908
Equity Value	484,961
Shares Outstanding	7,832
Equity Value Per Share	62

Results Levered DCF Microsoft C

${Wacc}/{Long \space Term \space Growth}$	-4 (%)	-3 (%)	-2 (%)	-1 (%)	0 (%)	1 (%)	2 (%)	3 (%)	4 (%)
8.6 (%)	43 Sell	45 Sell	48 Sell	51 Sell	54 Sell	59 Sell	65 Sell	73 Sell	85 Sell
9.1 (%)	42 Sell	44 Sell	46 Sell	49 Sell	52 Sell	56 Sell	61 Sell	68 Sell	77 Sell
9.6 (%)	41 Sell	42 Sell	44 Sell	47 Sell	50 Sell	53 Sell	58 Sell	63 Sell	71 Sell
10.1 (%)	39 Sell	41 Sell	43 Sell	45 Sell	48 Sell	51 Sell	55 Sell	60 Sell	66 Sell
10.6 (%)	39 Sell	40 Sell	42 Sell	44 Sell	46 Sell	49 Sell	52 Sell	56 Sell	62 Sell
11.1 (%)	38 Sell	39 Sell	40 Sell	42 Sell	44 Sell	47 Sell	50 Sell	53 Sell	58 Sell
11.6 (%)	37 Sell	38 Sell	39 Sell	41 Sell	43 Sell	45 Sell	48 Sell	51 Sell	55 Sell
12.1 (%)	36 Sell	37 Sell	38 Sell	40 Sell	41 Sell	43 Sell	46 Sell	49 Sell	52 Sell
12.6 (%)	35 Sell	36 Sell	37 Sell	39 Sell	40 Sell	42 Sell	44 Sell	47 Sell	50 Sell

${Wacc}/{Long \space Term \space Growth}$	-4 (%)	-3 (%)	-2 (%)	-1 (%)	0 (%)
8.6 (%)	43 Sell	45 Sell	48 Sell	51 Sell	54 Sell
9.1 (%)	42 Sell	44 Sell	46 Sell	49 Sell	52 Sell
9.6 (%)	41 Sell	42 Sell	44 Sell	47 Sell	50 Sell
10.1 (%)	39 Sell	41 Sell	43 Sell	45 Sell	48 Sell
10.6 (%)	39 Sell	40 Sell	42 Sell	44 Sell	46 Sell

${Wacc}/{Long \space Term \space Growth}$	1 (%)	2 (%)	3 (%)	4 (%)
11.1 (%)	47 Sell	50 Sell	53 Sell	58 Sell
11.6 (%)	45 Sell	48 Sell	51 Sell	55 Sell
12.1 (%)	43 Sell	46 Sell	49 Sell	52 Sell
12.6 (%)	42 Sell	44 Sell	47 Sell	50 Sell

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