Business Valuation of Microsoft Corporation: Based on the DDM Model and the FCFF Model

Yiying Lu ()
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Yiying Lu: Zhejiang University of Technology, School of Economics

A chapter in Proceedings of the 2025 5th International Conference on Enterprise Management and Economic Development (ICEMED 2025), 2025, pp 37-45 from Springer

Abstract: Abstract Since the four Industrial Revolutions brought people mechanisation, electrification, digital manufacturing technology, and smart production, more attention has been paid to technology. Moreover, developing technology has become the top priority in the modern world. The appearance of Microsoft Corporation (MSFT) hit the world dramatically. During its successful operation over five decades, MSFT has launched products like Microsoft Office, LinkedIn, and Xbox, bringing more investors to the company. However, some of them are confused about the company’s true value. Whether MSFT is fairly priced becomes the question for investors worldwide. So, this paper tries to calculate the intrinsic value of MSFT using multiple methods, as the DDM Model and the FCFF Model. The assessed value will be contrasted to the firm’s market share price to determine if it’s undervalued, overvalued, or reasonably priced. Two approaches are used to reduce haphazard. The paper tries to give investors a more comprehensive view of MSFT’s stock to help them make investment decisions and optimise their portfolios.

Keywords: Corporate Valuation; DDM Model; FCFF Model (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-811-0_5

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DOI: 10.2991/978-94-6463-811-0_5

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