Microsoft (MSFT) Homework - Financial Modeling - Stock Valuation Determine the intrinsic value per share for Microsoft at the end of the fiscal year using a two-stage model (use the following information to construct the model): 1. Assume Do is current annual dividend per share listed in Bloomberg or from a different free source form the web. 2. Assume that in first stage (lasting 5 years), MSFT's dividend per share grows by the Next 5 years growth estimate . (Be prepared to justify how would you choose this growth rate.....) 3. Assume that MSFT's dividend per share is expected to grow by x% per year = Mean Growth rate forever AFTER the five-year first stage growth is completed. 4. Calculate MSFT's cost of equity. Compare it to the cost of equity from Bloomberg or from a different provider you find online. Attach the report you used. Show formulas, calculations and interpretation. Have a nice table with your assumptions (CAGR using historical growth rates, independent analysts' estimates, management guidance, most recent growth rate etc). Submit it in electronic format. 1. Build a table and a chart with the main operating segments for the most recent past year with the following columns: Revenues, % of each segment in Total Revenues, Operating Income, % of each segment in Total Operating Income 2. Build a graph with the dividend annual growth rates since 2010 to the present.Add the EPS growth rates to the same chart for the same period of time. 3. What is Microsoft's stock intrinsic value using the Gordon constant growth model? 4. What is Microsoft's stock intrinsic value using a 2 stage growth model? How accurately does the model above value a share of MSFT stock? 5. What was the closing price at the end of the trade day on Oct 15, 2020? 6. What was the closing price at the end of the fiscal year? Attach a chart with daily stock price performance for the past 12 months. On the same chart add the quarterly EPS. 7. What are the possible problems with the models? Please comment on the strengths and weaknesses of each valuation approach. 8. Did you encounter any difficulties or challenges? 9. Take screenshots of the data you used and attach them next to your calculations (capturing the entire window not only the number for the input) 10. Would you buy/sell/hold this stock? Why? Why not? Do you trust your results? Why? Why not? Microsoft (MSFT) Homework - Financial Modeling - Stock Valuation Determine the intrinsic value per share for Microsoft at the end of the fiscal year using a two-stage model (use the following information to construct the model): 1. Assume Do is current annual dividend per share listed in Bloomberg or from a different free source form the web. 2. Assume that in first stage (lasting 5 years), MSFT's dividend per share grows by the Next 5 years growth estimate . (Be prepared to justify how would you choose this growth rate.....) 3. Assume that MSFT's dividend per share is expected to grow by x% per year = Mean Growth rate forever AFTER the five-year first stage growth is completed. 4. Calculate MSFT's cost of equity. Compare it to the cost of equity from Bloomberg or from a different provider you find online. Attach the report you used. Show formulas, calculations and interpretation. Have a nice table with your assumptions (CAGR using historical growth rates, independent analysts' estimates, management guidance, most recent growth rate etc). Submit it in electronic format. 1. Build a table and a chart with the main operating segments for the most recent past year with the following columns: Revenues, % of each segment in Total Revenues, Operating Income, % of each segment in Total Operating Income 2. Build a graph with the dividend annual growth rates since 2010 to the present.Add the EPS growth rates to the same chart for the same period of time. 3. What is Microsoft's stock intrinsic value using the Gordon constant growth model? 4. What is Microsoft's stock intrinsic value using a 2 stage growth model? How accurately does the model above value a share of MSFT stock? 5. What was the closing price at the end of the trade day on Oct 15, 2020? 6. What was the closing price at the end of the fiscal year? Attach a chart with daily stock price performance for the past 12 months. On the same chart add the quarterly EPS. 7. What are the possible problems with the models? Please comment on the strengths and weaknesses of each valuation approach. 8. Did you encounter any difficulties or challenges? 9. Take screenshots of the data you used and attach them next to your calculations (capturing the entire window not only the number for the input) 10. Would you buy/sell/hold this stock? Why? Why not? Do you trust your results? Why? Why not