Sie sind auf Seite 1von 2

Carlos Rafael Angeles Guzman A01098165

Case 1: Quizz

1. What is the possible meaning of the changes in stock price for Berkshire
Hathaway and Scottish Power plc on the day of the acquisition announcement?
Specifically, what does the $2.55 billion gain in Berkshires market value of
equity imply about the intrinsic value of PacifiCorp?

Berkshire was more diversified after the acquisition and the stock price increase.
The intrinsic value of Pacific Corp was good.

2. Based on the multiples for comparable regulated utilities, what is the range of
possible values for PacifiCorp? What questions might you have about this

The implied value of PacifiCorp is giving bad results for range of revenue as
compared to EBIT, EBITDA and Net income. Its expected to be good results:
Revenue > EBITDA > EBIT > NI

3. Assess the bid for PacifiCorp. How does it compare with the firms intrinsic value
perform a simple discounted cash-flow (DCF) analysis.

4. How well has Berkshire Hathaway performed? How well has it performed in the
aggregate? What about its investment in MidAmerican Energy Holdings?

Berkshire Hathaway has consistently outperformed the market since its
inception in 1965. In 1977, the firms year end closing share price was $107; on
May 24, 2005 the closing price on its Class A shares reached $85,500.

5. What is your assessment of Berkshires investments in Buffetts Big Four:
American Express, Coca-Cola, Gillette, and Wells Fargo?

They invested in successful firms. The total cost to Berkshires investment in the
Big 4 was $3.832 Billion, but the market value of their investment was $24.681
Billion. This means that Berkshires current gain on their investment in the big 4
is $20.849 Billion.

6. From Warren Buffetts perspective, what is the intrinsic value? Why is it
accorded such importance? How is it estimated? What are the alternatives to
intrinsic value? Why does Buffett reject them?
The discounted value of the cash that can be taken out of a business during its
remaining life. Intrinsic value is per-share progress. Buffett assessed intrinsic
value as the present value of future expected performance.

7. Critically assess Buffetts investment philosophy. Identify points where you
agree and disagree with him.

The invest strategies of Buffets seems easier than others investors that make
very complex financial analysis but most investors focus on financial statements
and net profit, but dont take into consideration intangible assets such as
management experience and patents. Buffet considers the intrinsic value of the
investment and analyses intangible aspects as well as financial aspects.

8. Should Berkshire Hathaways shareholders endorse the acquisition of

PacifiCorps intrinsic value is comparable to the industry, Berkshire is not adding
much more risk to their portfolio and its provide a stable long term investment
for the future.