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Breakdown · MSFT

Microsoft

WACC
FCF PROJECTION
SENSITIVITY
PER-YEAR CASH FLOWS
Year CF Discount factor PV Cumulative PV
1 9.39 0.8981 8.43 8.43
2 9.69 0.8066 7.82 16.25
3 10.00 0.7245 7.24 23.49
4 10.32 0.6507 6.71 30.21
5 10.65 0.5844 6.22 36.43
6 10.99 0.5248 5.77 42.20
7 11.34 0.4714 5.35 47.54
8 11.71 0.4233 4.96 52.50
9 12.08 0.3802 4.59 57.09
10 12.47 0.3415 4.26 61.35
11 12.78 0.3067 3.92 65.27
12 13.10 0.2755 3.61 68.88
13 13.43 0.2474 3.32 72.20
14 13.76 0.2222 3.06 75.26
15 14.11 0.1996 2.82 78.07
16 14.46 0.1792 2.59 80.67
17 14.82 0.1610 2.39 83.05
18 15.19 0.1446 2.20 85.25
19 15.57 0.1298 2.02 87.27
20 15.96 0.1166 1.86 89.13
REVERSE DCF

At $393.35, the market implies a stage-1 growth rate of 25.9%.

MARKET IMPLIES
25.9%
YOUR ASSUMPTION
3.2%
DELTA
+22.7pp

If $393.35 is correct and your other inputs (WACC 11.3%, 10+10y, terminal 2.5%) hold, the market needs MSFT to grow cash flow at 25.9% annually for the next 10 years.