Guidelines for the Security Analysis Project

Microsoft Corporation (MSFT)  

Your report, graphs, tables, and calculations must be processed on MS Excel, and the rest will be in a sheet. You should have a cover page including your name, stock symbol, and firm name, etc.

I. Valuation analysis

Valuate the stock using the dividend discount model and multi-period dividend discount model.

1. Provide sensitivity analysis on the constant dividend growth model showing how stock value varies with different discount rates and growth rates.

2. Comparing your estimation with the stock price on March 31, 2021, show whether the stock is undervalued or overvalued. Determine your trading strategy based on your estimation.