Question: Using Excel only and the NPV function near the end, please help: Microsoft Co. has the following projected sales, costs, net investment, and free cash
Using Excel only and the NPV function near the end, please help: Microsoft Co. has the following projected sales, costs, net investment, and free cash flow in millions. The anticipated growth rate in free cash flows after year 6 is 5% per year forever. There are 7.43 billion shares outstanding, and investors require a return of 8% on the company's stock and a comparable P/E ratio of 21. Calculate the company stock price using the P/E comparable approach to find the terminal value. (Round to 2 decimals) ($ in Billions)
1 2 3 4 5 6
Sales 232 244 256 269 282 296
Costs 120 126 132 139 146 153
Taxes 40 42 44 46 48 50
OCF (net income) 72 76 80 84 88 92
Net investment 50 53 55 58 61 64
FCF 22 23 25 26 27 28
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