Warren Buffet- Berkshire Hathaway Inc.

1. What is the possible meaning of the changes in stock price for Berkshire Hathaway and
Scottish Power on the day of the acquisition announcement: Specifically, what does the
$2.55 billion gin in Berkshire market value of equity imply about the intrinsic value of
PacifiCorp?
2. Based upon the multiples for comparable regulated utilities, what is the range of possible
values for PacifiCorp? What questions might you have about this range?
3. Assess the bid for PacifiCorp. How does it compare with the firm’s intrinsic value? As an
alternative how does the value from a DCF approach differ from say balance sheet
methods, income sheet methods (multiples), goodwill based methods, or value added
methods (EVA, economic profit,..etc.).
4. Should Berkshire Hathaway’s shareholders endorse the acquisition of PacifiCorp?
5. Should Scottish Power’s shareholders endorse the acquisition of PacifiCorp?
6. If you think Berkshire is overpaying for Pacific Corp, what would be a reasonable price?
If you believe that Berkshire is getting a good value, up to how much should Berkshire be
willing to offer?
7. Submit your Excel file to D2L to support your answers.
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