L6 Equity

According to MorningStar, dividend per share of Microsoft are 2.30, 2.54, 2.79 for 2021, 2022 and 2023 respectively.

The stock price of Microsoft was $375.95 at the end of 2023.

We assume a required rate of return of 10%

Using the dividend discount model, estimated value of a share is derived as follows:

Estimated value = 2.30 /(1.10) + 2.54 /(1.10)^2 + 2.79/(1.10)^3 + 375.95(1.10)^3 = $288.74