To work into the valuation of AAPL via discounted cash flow, I'll briefly go through a few main tidbits regarding modeling assumptions and historical financials. Apple's change in non-cash working capital is negative, although it does consistently produce positive readings with respect to overall net changes in operating assets/liabilities. Apple's capital expenditures have kept a fairly linear relationship with revenue over time, at a consistent 5% or just below. The company does incur a relatively high depreciation and amortization expense at approximately 9.2% a year. Operating income is conservatively estimated to remain at around 23.8%, with NOPAT and net income margins conservatively estimated around 17%-19%. (Apple's net income is higher than its NOPAT due to its interest and dividend income exceeding its interest expense, largely due to its substantial cash balance.) I have year-over-year revenue growth conservatively set at 3% per year to reflect the more competitive landscape and saturated consumer electronics market, while maintaining consistent margins as a consequence of its in-built degree of operating leverage.I calculate AAPL's cost of equity at 11.23% and tax-adjusted cost of debt at 1.79%, yielding a weighted average cost of capital of 7.64%. The long-term growth rate, g, is estimated at 2%, or just below the long-term GDP growth rate in developed nations. Disclosure: Long AAPL