Business Valuation Method in Investment Decision-Making

Abstract

In this thesis, valuation of Apple’s stock by employing three essential methods: Discounted Cash Flow, Free Cash Flow, and the Discounted Dividend Method. The aim is to project the future prices of Apple’s stock based on thorough analysis of the data provided in the company’s annual reports over the last decade, particularly focusing on factors like dividends. As per the recent stock market data, Apple’s stock is valued at $172.62 per share on March 18, 2024. However, through meticulous calculations using various valuation models, the author has determined that the intrinsic value of Apple’s stock stands at a higher value of $188.00 per share. This suggests that the stock is currently undervalued in the market. Given that the intrinsic value of the stock surpasses its current market price, so it is sensible for investors to consider buying Apple’s stock. By doing so, people may potentially benefit from the future expected growth and returns that the stock is projected to offer based on fundamental analysis. This analysis provides a suggestion for investors to have confidence in the long-term potential of Apple’s stock and consider it a wise investment choice.