You are valuing a brewery that makes craft beer. Among other assets, the firm owns a...

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"You are valuing a brewery that makes craft beer. Among other assets, the firm owns a number of paintings with a total value of $9M. The firm has $6M of cash on its balance sheet, of which $2M is deemed to be excess cash. The firm also owns 2,000 shares, each priced at $500, in a Scotch distillery on the Isle of Skye. You have estimated the cash flows generated by beer sales to be $11M per year forever. The cost of capital is 10%. What is the value of the firm?" "You are valuing a brewery that makes craft beer. Among other assets, the firm owns a number of paintings with a total value of $9M. The firm has $6M of cash on its balance sheet, of which $2M is deemed to be excess cash. The firm also owns 2,000 shares, each priced at $500, in a Scotch distillery on the Isle of Skye. You have estimated the cash flows generated by beer sales to be $11M per year forever. The cost of capital is 10%. What is the value of the firm?"

Answer rating: 100% (QA)

The firm has 9M of paintings 6M of cash and 1M of excess cash Th... View the full answer