Using an intrinsic value method, and discounting to the present, British Columbia Liquor Distribution Branch’s (BCLDB) projected future free cash flows, as the company is today, but taxed at statutory rates, the range of estimates is $12.13B to $84.91B, with a tighter range of a median (mid-point of the array of estimated values) of $21.23 to a mean (simple average of the array of estimated values) of $27.32B. Making allowances of bad debt of as much as 5 percent of outstanding loans, that is, by $1.55B, does not lower the estimated value of the company appreciably. Discounting for a bad-but-not-Great Depression-level of bad debt experience of 5 percent of the total loan portfolio, the range becomes a median of $20.20B to a mean of $25.99B. This version used adjustments to the free cash flow calculation which may not be fully reliable.
View the entire Valuation here: VS17_BCLiquor_JA1419_F1