Another Simple Calculation for Apple Inc. (AAPL)
In the last 12 months, including the most recent quarter, Apple Inc. (AAPL) had a total net income of $50,678 million. Taking this as a fair estimate of the cash flow available to equity holders, which in the case of Apple it is close, we can do a simple calculation. The one other necessary input for the calculation is the cost of equity capital. Here a reasonable estimate is 8.5%. (See Aswath Damodaran’s great blog on valuing Apple for details related to estimating this number).