Question

You are valuing a brewery that makes craft beer. Among other assets, the firm owns a number of paintings with a total value of $6M. The firm has $5M of cash on its balance sheet, of which $2M is deemed to be excess cash. The firm also owns 1,000 shares, each priced at $2,000, in a Scotch distillery on the Isle of Skye. You have estimated the cash flows generated by beer sales to be $12M per year forever. The cost of capital is 10%. What is the value of the firm?"

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

Cell reference -