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

In: Proceedings of the 2025 5th International Conference on Enterprise Management and Economic Development (ICEMED 2025)

Author

Listed:
  • Yiying Lu

    (Zhejiang University of Technology, School of Economics)

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.

Suggested Citation

  • Yiying Lu, 2025. "Business Valuation of Microsoft Corporation: Based on the DDM Model and the FCFF Model," Advances in Economics, Business and Management Research, in: Prasad Siba Borah & Norhayati Zakuan & Nazimah Hussin & Azlina Binti Md Yassin (ed.), Proceedings of the 2025 5th International Conference on Enterprise Management and Economic Development (ICEMED 2025), pages 37-45, Springer.
  • Handle: RePEc:spr:advbcp:978-94-6463-811-0_5
    DOI: 10.2991/978-94-6463-811-0_5
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