DCF Calculator

Value a stock based on its free cash flow and a 10-year discounted cash flow (DCF) model.

MSFT

Microsoft trades at $493.78, with free cash flow of $9.02 per share, analysts' expected free cash flow growth of 12.1%, and a weighted average cost of capital (WACC) of 10.1%.

Assumptions

Free Cash Flow per Share

Growth Rate (Years 1–5)

Growth Rate (Years 6–10)

Terminal Growth Rate

Discount Rate

Margin of Safety

Value of Years 1–10

$91.80

Terminal Value (Today)

$111.05

Terminal Share of Value

54.7%

FCF per Share in Year 10

$21.36

Fair Value (Discounted Cash Flow)

$202.85 -58.9% downside

Current Price: $493.78
Analyst Target: $572.92 +16.0%

Projected free cash flow per share

Fair value by discount rate and terminal growth

Green cells are above the current price, red cells below. The outlined cell is your current assumption.

Discount Rate ↓ / Terminal Growth →

Discount Rate ↓ / Terminal Growth →	1.5%	2.0%	2.5%	3.0%	3.5%
8.1%	$253.71	$267.09	$282.86	$301.76	$324.80
9.1%	$216.94	$226.11	$236.67	$248.98	$263.50
10.1%	$188.92	$195.46	$202.85	$211.30	$221.03
11.1%	$166.90	$171.70	$177.06	$183.08	$189.90
12.1%	$149.17	$152.78	$156.76	$161.19	$166.13

How the Discounted Cash Flow method works

The model projects free cash flow per share for the next 10 years using two growth rates, then assumes the cash flows keep growing at the terminal rate forever. Every year is discounted back to today at the discount rate, and the sum is the fair value. The discount rate has the biggest effect on the result, so the sensitivity table shows how the fair value moves as it changes.

Fair Value = Σ FCFₜ / (1 + r)ᵗ + Terminal Value / (1 + r)¹⁰

These models are estimates that depend entirely on your assumptions. They are provided for educational purposes only and are not investment advice. If you prefer a different valuation approach, try the Fair Value Calculator.