Berkshire Hathaway and Pacificorp Essay

Submitted By richardlai1234
Words: 562
Pages: 3
Open Document
To keep Scribd a valuable resource for everyone, we require that certain uploads meet a set of quality standards.
Among other requirements, you should upload something that is not already on Scribd and that you have permission to use. The best way to make sure what you are uploading will meet our quality standards is to upload something you wrote yourself, which will always be accepted.

Change in stock price of Berkshire Hathway implies following:


Cash is put to better use (from idle to cash-$43bln(page13) used for generating ROE of 7.5%/15%)


Synergies generated from existing business of Mid Western (Electricity) and new company Pacific Corp (Electricity). Market perceives that more value is added to the acquirer from the acquisition.


Gain of $2.17bln implies that intrinsic value of Pacific Corp is $2.17bln more than purchase consideration.
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 range?
Summary of implied value of Pacific Corp Valuation multiples (Exhibit 10)($mln)
EV as multiple of: MV Equity as multiple of: Rev EBIT EBITDA Net Income EPS BV Median
6252 8775 9023 7596 4277 5904
Mean
6584 9289 9076 7553 4308 5678 Range of possible value (EV): $6.2bn to $9.2bn Range of MV: $4.2bn to $5.9bn Most commonly used multiples for finding intrinsic value is EV/EBITDA because EBITDA is commonly used as a proxy for cash flow available to the firm.

jhgjhghjfjdfghdh - College Essay - Hua-Zhang www.studymode.com/essays/Jhgjhghjfjdfghdh-39632359.html Specifically, what does the $2.55 billion gain in Berkshire's market value of equity ... what do you think PacifiCorp was worth on its own before its acquisition by ...
[DOC]Warren E. Buffett, 2005 (TN) textbook-testbank.com/wp-content/.../TN1_Warren_E_Buffett_2005.doc Specifically, what does the $2.55 billion gain in Berkshire's market value of equity ... what do you think PacifiCorp was worth on its own before its acquisition by ...
Case Warren Buffett 2005_百度文库 wenku.baidu.com/view/852bde3a0912a21614792956.html 17 Dec 2011 - The acquisition of PacifiCorp renewed public interest in its sponsor, Warren Buffett. In many ... “I will keep well over 99% of my net worth in Berkshire. .... Prior to March 2002, neither Buffett nor
Show More

Related Documents: Berkshire Hathaway and Pacificorp Essay

Essay on Warren E,buffett,2005

Buffet Berkshire Hathaway Inc. is a famous company which also involves in many different business segments. It was originally operated as a cotton manufacturing company. In 1965, Warren Buffet declared to take over it and he became the chairman and CEO of Berkshire Hathaway. Since then, this company started to be well known by the world. Market value implication On May 24, 2005, Buffet announced that MidAmerican Energy Holding Company, a subsidiary of Berkshire Hathaway would acquire PacifiCorp…

Words 958 - Pages 4

Warren Buffet Case Essay

Executive Summary Background / Problems Warren Buffett, The CEO of Berkshire Hathaway, historically delivers to his shareholders noteworthy excess returns, however, with how massive this firm has become, it is becoming increasingly more difficult to deliver similar results. In his annual letter to his shareholders, Buffett explains that his “elephant” strategy is the only way for Berkshire to make sufficient gains in their net worth. With the…

Words 1337 - Pages 6

Essay on case 1 Warren Buffet

Laith Jabra Warren Buffet Case Finance-550 Warren Buffet decided to buy Berkshire Hathaway in 1965, believing it can turn the financial decline around. Over the next 20 years, Buffet and his partners decided to invest in two insurance companies and get out of the textile business in which Berkshire originally started. Buffet decided to invest in many other companies besides just insurance. He decided to rebrand Berkshire as “ a holding company owning subsidiaries engaged in a number of diverse…

Words 954 - Pages 4

Essay on Berkshire Hathaway's Pacificorp Aqusitcion

Warren E. Buffett, 2005 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 Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? Answer: - The possible meaning of the change of the stock is that the facts that are created in the deal had a positive effect on both the buyers ( BRK) and the sellers which…

Words 1536 - Pages 7

The Impact of Hydropower Dams on California's Populations of Anadromous Fish: What Can Be Done to Mitigate the Dams Effects and Restore California's Watersheds. Essay

Running head: IMPACT OF DAMS ON ANADROMOUS FISH The Impact of Hydropower Dams on California's Populations of Anadromous Fish: What Can be done to mitigate the Dams Effects and Restore California's Watersheds. Russell Cole Western Governors University The Impact of Hydropower Dams on California's Populations of Anadromous Fish: What can be done to mitigate the Dams Effects and Restore California's Watersheds. The indigenous people of California were completely dependent on the seemingly…

Words 2780 - Pages 12