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 | 77,849 | 86,833 | 93,580 | 85,320 | 89,950 | 110,360 | 125,843 | 143,015 | 156,555.63 | 171,378.28 | 187,604.33 | 205,366.66 | 224,810.73 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | |||||||||||||
| Operating Cash Flow | 28,833 | 32,231 | 29,080 | 33,325 | 39,507 | 43,884 | 52,185 | 60,675 | 61,031.01 | 66,809.41 | 73,134.91 | 80,059.30 | 87,639.30 |
| 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 | 24,576 | 26,746 | 23,136 | 24,982 | 31,378 | 32,252 | 38,260 | 45,234 | 47,458.67 | 51,952.05 | 56,870.86 | 62,255.37 | 68,149.70 |
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 | 77,849 | 86,833 | 93,580 | 85,320 | 89,950 | 110,360 | 125,843 | 143,015 | 156,555.63 | 171,378.28 | 187,604.33 | 205,366.66 | 224,810.73 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 28,833 | 32,231 | 29,080 | 33,325 | 39,507 | 43,884 | 52,185 | 60,675 | 61,031.01 | 66,809.41 | 73,134.91 | 80,059.30 | 87,639.30 |
| 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 | 24,576 | 26,746 | 23,136 | 24,982 | 31,378 | 32,252 | 38,260 | 45,234 | 47,458.67 | 51,952.05 | 56,870.86 | 62,255.37 | 68,149.70 |
| WACC | |||||||||||||
| PV LFCF | 43,684.34 | 44,017.28 | 44,352.74 | 44,690.77 | 45,031.37 | ||||||||
| 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 |