controversial decisions required to save or reposition the company Conglomerate In business‚ a conglomerate is a company involved in multiple lines of business that have little relationship to one another. One well-known example is Warren Buffett’s Berkshire Hathaway‚ which owns companies as varied as utilities‚ newspapers‚ food processors and furniture stores. Conglomerate diversity‚ then‚ refers to diversification by entering entirely new and unrelated lines of business. If you owned‚ say‚ a hardware
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What are the qualities of a good entrepreneur? It is known that‚ in the context of the creation for profit-enterprises‚ entrepreneur is often synonymous with founders. An entrepreneur will face many obstacles‚ challenges and difficulties in business operation. To be successful‚ a good entrepreneur will need have some extraordinary abilities. So what is an entrepreneur? The entrepreneur‚ with his dream and will to found a private kingdom‚ to conquer adversity‚ to achieve success for its own sake
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Case study 1 (a) What is the intrinsic value? A: The intrinsic value is a way to estimate the real value of a company or a capital‚ according to the present value of its future cash flow. Why is the intrinsic value so important? A: Intrinsic value is all important and is the only logical way to evaluate the relative attractiveness of investments and businesses. It shows investors the growth ability and profitability of the company or capital‚ which focus on its future trends. How to estimate
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Abstract This case study will provide an overview of the Coca-Cola Company as the perfect business as it pertains to the characteristics that make up a good business. A series of three questions will be discussed. Identifying four characteristics of a good business‚ identify four companies that display these characteristics‚ and in three years after purchasing common stock in these companies determine if the present analysis was correct. Discuss at least four characteristics of a good
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total revenues fell from $983 million in 2006 to $616 million in 2011‚ and company lost money in each of the next four years. The company also faced to a large number of debts which the maturity dates is nearby. In this situation‚ Warren Buffett’s Berkshire Hathaway
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handy calculator tool will help you deal with your accounting nightmare! Use our special BNSF calculator for the unusual dual exchange ratios involved in the prorated stock election for the merger of Burlington Northern Santa Fe Corp into Berkshire Hathaway Inc. Because the stock election was oversubscribed‚ everyone who made this election received cash to boot. Click on the picture of the BNSF train engine to access the calculator. Our regular "cash to boot" calculator has
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specific‚ definite‚ vivid rather than obscure‚ vague. Evidence Considered one of the richest man in the world (3th in 2011‚ $50 billion)‚ Warren is undoubtedly one of the most successful business investor in history. He has led his company (Berkshire Hathaway) through investments and acquisitions‚ to exponential growth. An example is the fact that‚ a $1000 investment back in 1959 in his company‚ is today‚ worth $25 million. Sometimes called “Oracle of Omaha”‚ others “The wizard of Omaha” or even
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The Coca-Cola Company In 2006‚ The Coca-Cola Company adopted a new compensation plan for its Board of Directors. Its main point is that‚ the members of the Board get payed if the Company meets the performance goals it targeted. During a period of 3 years (mid-point of the Company´s performance strategy)‚ yearnings per share must raise at a compound rate of 8% a year. The plan foresees a flat fee of $175.000 in stock each year‚ with no extra payments. When the performance goal is met‚ at the end
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Warren E. Buffett‚ 2005 Case Questions: 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 $2.17-billion gain in Berkshire’s market value of equity imply about the intrinsic value of PacifiCorp? 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? Assess the bid for
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the economic reality of the business and the book value only reflects the historical data which already happened in the past (b) Critically assess Buffett’s investment philosophy. Identify points where you agree and disagree with him. (c) Should Berkshire Hathaway’s shareholders endorse the acquisition of PacifiCorp? Why? CASE 2: Bill Miller and Value Trust: (a) How well has Value Trust performed in recent years? In making that assessment‚ what benchmark(s) are you using? How do you measure
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