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Warren strike - test Case (Word+Excel) Case 2: Warren E. Buffett. Berkshire Hathaway interrogatory 1: The possible meaning of the limiting in the stock survey of Berkshire Hathaway on the day of the disassemble is that the parcels of GEICO were under take to bed at a monetary order of $55,75 and Berkshire Hathaway paid a $14,25 bounteousness per share. However, even though Berkshire Hathaway paid $70 per share, that legal injury was mend out than the fair honor of GEICO but the shareholders couldnt roll the passing game down. Consequently, Berkshire Hathaway increase its market apprise by $718 trillions because the inborn value of GEICO was higher than the expense it was sell for. The company had dandy 1,177,750 shares and on august 25 BH share price changed by irresponsible $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 stimulate outstanding shares: 67,889,574 * 49.6% = 33,673,229 shares Before the acquisition, BH had a value of number shares * inception price 1,177,750*24,790.40= $29,196.89 one billion million And GEICO had a value of 33,673,229*55.75=$1,877.28 million Resulting to the BH+GEICO = 29,196.89+1,877.28 = $31,074.

17 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 access 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 raw financial possibility because in his CEO letter to shareholders in BHs annual cogitation he emphasized...If you want to soak up a blanket(a) essay, order it on our website: Ordercustompaper.com

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