Microsoft Corporation 2011 2010 2009

Net income....................... $23,958 $18,846 -

Stockholders' equity........... 57,083 46,175 $39,558

Dividends......................... 5,394 4,547 -

Net common stock issued.... -7,656 -7,682 -

I am given the information above. Using this information from above. Assume the free cash flow to common equity for Microsoft is for the terminal year. Also assume that Microsoft will grow at a constant rate of 3 percent and that Microsoft's cost of equity is 8 percent. Compute Microsoft's terminal value.

If I am understanding correctly the formula would be Free cash flow/ (cost of equity - growth rate). First, is that the correct formula and second with the information given I need some assistance calculating the free cash flow rate. Would the free cash flow be the Net Income - dividends for 2011?