Microsoft Corporation (MSFT)
Discount cash flow analysis
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $15.35 | $15.23 | $15.11 | |
| Terminal Growth% | 0 | $15.35 | $15.23 | $15.11 |
| +1% | $15.35 | $15.23 | $15.11 |
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 $31.64 (undervalued by 7.73%) - 5 hours ago
- Valuecruncher created a new valuation of $31.64 (undervalued by 7.73%) - 17 hours ago
- JMILOSAK created a new valuation of $33.01 (undervalued by 14.74%) - 25 days ago
- ankallissankari created a new valuation of $28.80 (undervalued by 1.59%) - 28 days ago
- lausan created a new valuation of $31.53 (undervalued by 13.25%) - 1 month ago
- clp1001 created a new valuation of $31.00 (undervalued by 0.13%) - 2 months ago
- jfachl01 created a new valuation of $31.42 (undervalued by 4.8%) - 3 months ago
- Maela created a new valuation of $30.89 (undervalued by 4.29%) - 3 months ago
- Maela created a new valuation of $30.89 (undervalued by 4.29%) - 3 months ago
- smdet created a new valuation of $39.47 (undervalued by 42.34%) - 4 months ago
- smdet created a new valuation of $28.84 (undervalued by 4.0%) - 4 months ago
- smdet created a new valuation of $39.49 (undervalued by 42.41%) - 4 months ago
- tweakie created a new valuation of $42.81 (undervalued by 64.91%) - 5 months ago
- carswelli created a new valuation of $34.93 (undervalued by 48.26%) - 7 months ago
- mindracer created a new valuation of $29.77 (undervalued by 26.95%) - 7 months ago
- GordonGekko created a new valuation of $29.43 (undervalued by 19.98%) - 7 months ago
- GordonGekko created a new valuation of $27.61 (undervalued by 13.67%) - 8 months ago
- woyeyele created a new valuation of $19.98 (overvalued by 10.76%) - 8 months ago
- babsle16 created a new valuation of $23.76 (undervalued by 7.32%) - 9 months ago
- GordonGekko created a new valuation of $23.15 (undervalued by 22.03%) - 10 months ago
- swampler created a new valuation of $21.71 (undervalued by 10.37%) - 11 months ago
- SethWellbourne created a new valuation of $21.68 (undervalued by 24.03%) - 11 months ago
- savov created a new valuation of $22.46 (undervalued by 22.53%) - 11 months ago
- savov created a new valuation of $22.46 (undervalued by 22.53%) - 11 months ago
- savov created a new valuation of $23.09 (undervalued by 25.97%) - 11 months ago
- rileyj98 created a new valuation of $25.50 (undervalued by 49.47%) - 11 months ago
- afi created a new valuation of $25.48 (undervalued by 53.03%) - 1 year ago
- balli created a new valuation of $25.47 (undervalued by 68.12%) - 1 year ago
- thecatpreacher created a new valuation of $25.47 (undervalued by 68.12%) - 1 year ago
- rs12345 created a new valuation of $15.23 (overvalued by 0.26%) - 1 year ago
- rs12345 created a new valuation of $12.79 (overvalued by 16.24%) - 1 year ago
- rs12345 created a new valuation of $15.23 (overvalued by 0.26%) - 1 year ago
- rs12345 created a new valuation of $15.34 (undervalued by 0.46%) - 1 year ago
- freecashsurfing created a new valuation of $27.14 (undervalued by 37.7%) - 1 year ago
- GordonGekko created a new valuation of $25.34 (undervalued by 32.46%) - 1 year ago
- GordonGekko created a new valuation of $25.79 (undervalued by 25.19%) - 1 year ago
- GordonGekko created a new valuation of $25.26 (undervalued by 27.13%) - 1 year ago
- sridhariyer27 created a new valuation of $24.16 (undervalued by 6.81%) - 1 year ago
- GordonGekko created a new valuation of $30.86 (undervalued by 40.53%) - 1 year ago
- TheCrunchBlog created a new valuation of $30.86 (undervalued by 25.6%) - 1 year ago
- GordonGekko created a new valuation of $32.67 (undervalued by 18.28%) - 1 year ago
- GordonGekko created a new valuation of $31.85 (undervalued by 14.16%) - 1 year ago
- andrew created a new valuation of $23.54 (overvalued by 22.62%) - 1 year ago
- lancewiggs created a new valuation of $16.30 (overvalued by 45.36%) - 1 year ago
- KiwiEMH created a new valuation of $30.46 (undervalued by 1.77%) - 1 year ago
- acoy created a new valuation of $25.84 (overvalued by 15.14%) - 1 year ago
- GordonGekko created a new valuation of $28.82 (undervalued by 6.27%) - 1 year ago
- contrarian created a new valuation of $32.81 (undervalued by 7.75%) - 1 year ago
- KiwiEMH created a new valuation of $34.73 (undervalued by 25.15%) - 1 year ago
- matrixxx created a new valuation of $32.50 (undervalued by 18.14%) - 1 year ago
- GordonGekko created a new valuation of $31.17 (undervalued by 13.3%) - 1 year ago
- TheCrunchBlog created a new valuation of $33.01 (undervalued by 19.99%) - 1 year ago
- KiwiEMH created a new valuation of $27.29 (undervalued by 1.0%) - 1 year ago
- Ashkat created a new valuation of $46.69 (undervalued by 71.09%) - 1 year ago
- KiwiEMH created a new valuation of $27.21 (overvalued by 0.29%) - 1 year ago
- jeremy created a new valuation of $35.04 (undervalued by 15.19%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 237,453 |
| Net Debt (Long-term borrowings less cash): | -23,662 |
| Equity Value: | 135,758 |
| Number of Shares Outstanding: | 8,890,000,000 |
| Calculated value per share: | $15.23 |
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.