Chap06_Worksheet1_Spreadsheet.sheets

	A	B	C	D	E	F	H	I
1	Discounted Cash Flow Example - Jimba Jomba Jumba Juice - Present Value
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3		Year	Cash Flows	Present Value Multiplier	Present Value of Cash Flow	Comments	$ 56.00	Current Market Price
4		2018	$ 1.80	0.909	$ 1.636	$1.80 dividend	10%	Required Rate of Return
5		2019	$ 2.00	0.826	$ 1.653	$2.00 dividend	We expect to receive cash flows in
6		2020	$ 77.25	0.751	$ 58.039	$2.25 dividend + $75 estimated proceeds from sale of stock	the form of dividends and stock price.
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8				Total:	$ 61.328	Present value of stock =SUM(discounted-cash-flows)
9							Yes! It is a good value. We calculate
10							the present value to be $61.33 and
11				Present Value Multiplier = 1 / (1+Rate)Time			the current market price is only $56.
12							The model is telling us that we can
13							buy $61.33 of value for only $56.
14							But remember that this is just our
15							forecast. It is not a guarantee! We
16							are simply tilting the odds in our favor
17							that we will identify prudent, long-term
18							oriented companies.
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