Microsoft Corporation (MSFT)
Discount cash flow analysis
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $22.66 | $22.40 | $22.15 | |
Terminal Growth% | 0 | $22.72 | $22.46 | $22.21 |
+1% | $22.79 | $22.52 | $22.27 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $45.85 (overvalued by 19.29%) - 6 months ago
- acrouse created a new valuation of $57.76 (undervalued by 50.22%) - over 3 years ago
- TravisEz13 created a new valuation of $39.99 (undervalued by 17.83%) - over 3 years ago
- TravisEz13 created a new valuation of $35.65 (undervalued by 27.55%) - 4 years ago
- mgood created a new valuation of $40.70 (undervalued by 33.05%) - over 4 years ago
- beatsj8 created a new valuation of $32.87 (undervalued by 27.35%) - over 5 years ago
- bency123 created a new valuation of $31.14 (undervalued by 26.95%) - over 5 years ago
- gsteens created a new valuation of $26.32 (overvalued by 8.55%) - 6 years ago
- PARKERTG created a new valuation of $31.72 (undervalued by 25.77%) - over 6 years ago
- PARKERTG created a new valuation of $31.72 (undervalued by 25.77%) - over 6 years ago
- JMILOSAK created a new valuation of $33.01 (undervalued by 14.74%) - 7 years ago
- ankallissankari created a new valuation of $28.80 (undervalued by 1.59%) - 7 years ago
- lausan created a new valuation of $31.53 (undervalued by 13.25%) - 7 years ago
- clp1001 created a new valuation of $31.00 (undervalued by 0.13%) - 7 years ago
- jfachl01 created a new valuation of $31.42 (undervalued by 4.8%) - over 7 years ago
- Maela created a new valuation of $30.89 (undervalued by 4.29%) - over 7 years ago
- Maela created a new valuation of $30.89 (undervalued by 4.29%) - over 7 years ago
- smdet created a new valuation of $39.47 (undervalued by 42.34%) - over 7 years ago
- smdet created a new valuation of $28.84 (undervalued by 4.0%) - over 7 years ago
- smdet created a new valuation of $39.49 (undervalued by 42.41%) - over 7 years ago
- tweakie created a new valuation of $42.81 (undervalued by 64.91%) - over 7 years ago
- carswelli created a new valuation of $34.93 (undervalued by 48.26%) - over 7 years ago
- mindracer created a new valuation of $29.77 (undervalued by 26.95%) - over 7 years ago
- GordonGekko created a new valuation of $29.43 (undervalued by 19.98%) - over 7 years ago
- GordonGekko created a new valuation of $27.61 (undervalued by 13.67%) - over 7 years ago
- woyeyele created a new valuation of $19.98 (overvalued by 10.76%) - over 7 years ago
- babsle16 created a new valuation of $23.76 (undervalued by 7.32%) - almost 8 years ago
- GordonGekko created a new valuation of $23.15 (undervalued by 22.03%) - almost 8 years ago
- swampler created a new valuation of $21.71 (undervalued by 10.37%) - almost 8 years ago
- SethWellbourne created a new valuation of $21.68 (undervalued by 24.03%) - almost 8 years ago
- savov created a new valuation of $22.46 (undervalued by 22.53%) - 8 years ago
- savov created a new valuation of $22.46 (undervalued by 22.53%) - 8 years ago
- savov created a new valuation of $23.09 (undervalued by 25.97%) - 8 years ago
- rileyj98 created a new valuation of $25.50 (undervalued by 49.47%) - 8 years ago
- afi created a new valuation of $25.48 (undervalued by 53.03%) - 8 years ago
- balli created a new valuation of $25.47 (undervalued by 68.12%) - 8 years ago
- thecatpreacher created a new valuation of $25.47 (undervalued by 68.12%) - 8 years ago
- rs12345 created a new valuation of $15.23 (overvalued by 0.26%) - 8 years ago
- rs12345 created a new valuation of $15.34 (undervalued by 0.46%) - 8 years ago
- rs12345 created a new valuation of $12.79 (overvalued by 16.24%) - 8 years ago
- rs12345 created a new valuation of $15.23 (overvalued by 0.26%) - 8 years ago
- freecashsurfing created a new valuation of $27.14 (undervalued by 37.7%) - 8 years ago
- GordonGekko created a new valuation of $25.34 (undervalued by 32.46%) - 8 years ago
- GordonGekko created a new valuation of $25.79 (undervalued by 25.19%) - over 8 years ago
- GordonGekko created a new valuation of $25.26 (undervalued by 27.13%) - over 8 years ago
- sridhariyer27 created a new valuation of $24.16 (undervalued by 6.81%) - over 8 years ago
- GordonGekko created a new valuation of $30.86 (undervalued by 40.53%) - over 8 years ago
- TheCrunchBlog created a new valuation of $30.86 (undervalued by 25.6%) - over 8 years ago
- GordonGekko created a new valuation of $32.67 (undervalued by 18.28%) - over 8 years ago
- GordonGekko created a new valuation of $31.85 (undervalued by 14.16%) - over 8 years ago
- andrew created a new valuation of $23.54 (overvalued by 22.62%) - almost 9 years ago
- lancewiggs created a new valuation of $16.30 (overvalued by 45.36%) - almost 9 years ago
- KiwiEMH created a new valuation of $30.46 (undervalued by 1.77%) - almost 9 years ago
- acoy created a new valuation of $25.84 (overvalued by 15.14%) - almost 9 years ago
- GordonGekko created a new valuation of $28.82 (undervalued by 6.27%) - almost 9 years ago
- contrarian created a new valuation of $32.81 (undervalued by 7.75%) - almost 9 years ago
- KiwiEMH created a new valuation of $34.73 (undervalued by 25.15%) - almost 9 years ago
- matrixxx created a new valuation of $32.50 (undervalued by 18.14%) - almost 9 years ago
- GordonGekko created a new valuation of $31.17 (undervalued by 13.3%) - almost 9 years ago
- TheCrunchBlog created a new valuation of $33.01 (undervalued by 19.99%) - almost 9 years ago
- KiwiEMH created a new valuation of $27.29 (undervalued by 1.0%) - almost 9 years ago
- Ashkat created a new valuation of $46.69 (undervalued by 71.09%) - almost 9 years ago
- KiwiEMH created a new valuation of $27.21 (overvalued by 0.29%) - almost 9 years ago
- jeremy created a new valuation of $35.04 (undervalued by 15.19%) - almost 9 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 481,410 |
Net Debt (Long-term borrowings less cash): | -23,662 |
Equity Value: | 162,964 |
Number of Shares Outstanding: | 8,890,000,000 |
Calculated value per share: | $22.46 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.