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Warren strike - analyse Case (Word+Excel) Case 2: Warren E. Buffett. Berkshire Hathaway head word 1: The possible meaning of the modification in the stock hurt of Berkshire Hathaway on the day of the contract is that the administers of GEICO were under pass judgmentd at a wrong of $55,75 and Berkshire Hathaway nonrecreational a $14,25 amplitude per share. However, even though Berkshire Hathaway paid $70 per share, that expense was slump out than the fair evaluate of GEICO but the shareholders couldnt publish the passing game down. Consequently, Berkshire Hathaway change magnitude its market appreciate by $718 trillions because the inborn nurture of GEICO was higher than the price it was change for. The company had dandy 1,177,750 shares and on august 25 BH share price changed by substantiative $609.60. At the end of the session, the price was $25,400. 1,117,750 * 609.60 = 717,956,400 gain. In addition, BH already owned 50.4% of GEICO. GEICO had on april 30 1995 a derive of 67,889,574 shares outstanding. BH is buy 49.6% of the fill in outstanding shares: 67,889,574 * 49.6% = 33,673,229 shares Before the acquisition, BH had a value of number shares * initiation price 1,177,750*24,790.40= $29,196.89 billion And GEICO had a value of 33,673,229*55.75=$1,877.28 meg Resulting to the BH+GEICO = 29,196.89+1,877.28 = $31,074.

17 one million million After the acquisition, BH had a value of Total shares* resolution price 1,177,750*25,400= $29,914.85 million And GEICO had a value of 33,673,229*70=$2357.13 Resulting to the total BH+GEICO = 29,914.85+2357.13 = $32,271.98 million and the difference is 32,271.98-31,074.17 = $1,197.81 The difference is overture from the GEICO shares Difference/total GEICO shares 1,197.81 million / 33,673,229=$35.57 mispricing per share and GEICO shareholders only got $14.25 of this value. The $21.32 went to BH shareholders. Question 4: Buffets investment philosophy disagrees with redbrick financial possibility because in his CEO letter to shareholders in BHs annual extend he emphasized...If you want to originate a blanket(a) essay, order it on our website: Ordercustompaper.com

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