Warren Buffet Case Study Essay Example for Free

Warren Buffet Case Study Essay Executive Summary: On May 24, 2005, it was announced that Berkshire Hathaway would acquire PacifiCorp. from parent, Scottish Power, for $5.1 billion in cash and $4.3 in liabilities and preferred stock (Bruner, Eades, Schill). After the announcement of the acquisition, the market responded very positively the same day. Berkshire’s stock price had increased by 2.4%, PacifiCorp.’s parent, Scottish Power’s by 6.28% and SP 500 closed up 0.02%. Berkshire Hathaway’s 2.4% shares increase was equivalent to $2.55 billion. Since this is not consistent with results of other acquisitions of the same order, it must be Warren Buffet’s â€Å"cult†-like following that allows this to happen. Rather than rationally studying the market information of the acquisition, the general public puts their trust in Warren Buffett as an investment guru. Berkshire held many different types of industries in their portfolio, but prior to the acquisition of PacifiCorp., Berkshire did not have significant investment in the energy sector. The now more diversified investment portfolio of Berkshire after the acquisition was expected to provide more stable returns. Often throughout the case study, Buffett’s view on a company’s â€Å"intrinsic value† was spotlighted as one of his predominate investing strategies. Book value and the investment outline are the two alternatives to intrinsic value. Buffett rejects them because these alternatives neither can give clear and accurate information about the expected profit in the investment. A company’s intrinsic value, though, is a company’s value relative to the present value of its discounted future cash flows (Bruner, Eades, Schill). And this is how Buffett evaluates his investments, asking will future cash flows provide an acceptable return on investment. Problem: The primary problem in the Warren Buffett case study would be whether or not the intrinsic value of PacifiCorp. justifies Berkshire Hathaway’s bid price? Secondary problems presented include how does the PacifiCorp. acquisition stand up against Berkshire’s â€Å"elephant only† approach to investing? Thus, whether or not PacifiCorp.’s acquisition would be able to further Berkshire’s already staggering annual growth rate of 24%? Analysis: Drawing from the financial statements in the text’s exhibits, PacifiCorp.’s annual operating cash flows equaled $1.76 billion. Given this calculation, it would seem as though it would be a relatively short time before Berkshire Hathaway would accumulate enough value on the acquisition for them to receive an expedient return on their investment. â€Å"The cost of lost opportunity† is a philosophy of Warren Buffett’s that also applies to this case (Bruner, Eades, Schill). By entering into the energy market with the acquisition of PacifiCorp., the firm can hopefully continue on their incredible growth rate trend. Without it, Berkshire would likely have eventually plateaued. Recommendation: It is advised that Berkshire Hathaway follow through with the acquisition of PacifiCorp. The firm will continue to cycle large sums of cash flows through their company with this deal, therefore inducing growth and also adding intrinsic value to their firm. The firm also has a lot to gain by entering into the energy market, which already has a stronghold on American interests and adds diversity to their portfolio.

Inherit The Wind Essay -- English Literature Essays

Inherit The Wind Rachel’s Quest for independence I think Rachel was looking for the ways for her independence and willing to protect Bert during the trial. Rachel believed that Bert was innocent. Rachel was in love with Bert, she knew that Bert was not a criminal and she wanted him to confess the court and the town’s people that he had done wrong, and it was all a joke and he was sorry for that. Rachel said to Bert, â€Å"Bert, why don’t you tell `em it was all a joke? Tell `em you didn’t mean to break a law, and you won’t do it again.† This clearly shows that she was worried about him and wanted to help him. But she knew that what he had done was bad. And she was also quite sure that he would not win the trial against the mayor. Her father was a powerful man. The townspeople liked him and appreciated what he had done and was doing for them. Rachel soon found that she could not convince him to confess because he did not believe that he had done something wrong. As all he had told the pupils were the quotations from the book Hunter’s Civic Biology and from Chapter 17, Darwin’s origin of species. He learned from the books, â€Å"That man was not stuck here like a geranium in a flower pot; that living comes from a long miracle, it didn’t just happen in seven days.† All this shows that his thoughts and ideas were based on scientific facts, but her father only trusted the Bible. Rachel has been always scared of her father. When she was little she used to have bad dreams. She ...

Parenthood: Psychology and Birth Order Essay

Every family system is unique and one of the major contributing factors that determine that is birth order. There have been studies that have been conducted that suggest that your identity, character and personality can be swayed by the order you were born. In the 1989 movie Parenthood, the complexity, culture, gender issues and constant changing of family is examined. This essay will take a deeper look at two family systems from Parenthood and determine their ‘typical’ and ‘untypical’ birth order behaviors. Gil and Karen Buckman have raised their three kids in such a way that they all exhibit ‘typical’ birth order behavior. Kevin is the oldest and strives for perfection through academics and athletics; this is one of the main characteristics of being a first born. In school Kevin’s teacher informs Mr. and Mrs. Buckman that Kevin has emotional problems and too many worries for his age and suggests that a Special Ed program. The Buckman’s do not feel the need to put him into special classes, and will have him start seeing a therapist; this is because they feel he is a direct reflection on them. Kevin also plays baseball, and during the games demonstrates fear of failing. Parents often look at the first born as a second parent and this can be related back to Kevin when he says, â€Å"I have to do everything†¦Ã¢â‚¬  At the end of the film Kevin also tells his father that he wants to be just like him when he grows up; this is no surprise because Gil (also a first born) is a business executive and first borns like law, order and definite boundaries. ‘Typical’ first borns have high expectations for themselves (Kevin shows this in baseball, always beating himself up) and strive to live up to their parents expectations. Taylor is the middle child of Gil and Karen and is not shown in the movie as much as her two brothers. Middle children tend to crave attention and there in a scene in the movie where Taylor gets in trouble at school for kissing too many boys, and by doing this she will get attention from her parents. Middle children also are called ‘the forgotten child’ and in the film it seemed like the director intentionally put more emphasis Kevin and Justin rather then Taylor. At the beginning of the film Justin was the youngest child of Gil and Karen, and functioned like a ‘typical’ baby. At Kevin’s birthday party and other family events, Justin was always doing funny tricks and creating laughter among the guests. At the end of the movie, Gil and Karen had just had another baby, so as the viewer we do not know what role Justin will develop into. Gil and Karen have a ‘typical’ birth order family and that could be due to a number of contributing factors. Gil’s family growing up could be characterized as a ‘typical’ birth order family, so when he was raising his kids he could have used the same parenting techniques his parents did. The kids’ roles could also be determined by the number of years that is between all of them, there are always exceptions to the system. Helen Buckman and her ex-husband Ed raised their two kids in a way that they exhibit ‘untypical’ birth order behavior. Julie is a first born, like Kevin, but tends to act more like a middle child with her rebellious, free spirited behavior. Whether it is shaving her head, running away or getting married she is always trying to get attention out of her mom somehow. Julie does not embody the ‘typical’ first born mentality, she is not goal orientated, a high achiever or afraid of failure. Gary is the baby but is missing one of the key personality traits, entertainment. Gary can be seen as a ‘typical’ baby because he is rebellious, temperamental, and ambivalent. His rebellion can be seen when he locks his room and doesn’t let his mom know what is in his paper bag, this is probably because he is having emotional problems due to his parents divorce and does not know how to handle it. He is temperamental and ambivalent because he does what he wants, when he wants to and doesn’t seem to care. Helen, Julie, and Gary’s family dynamic could be ‘untypical’ because of the recent divorce their family went through. The person watching the movie does not know what the family was like before this event, but the kids’ attitudes could have potentially changed. Families are all different, and that is what makes them all different. Since this year I never even knew such studies existed. Learning about birth order studies has made me think about my own family, and whether we are ‘typical’ or ‘untypical’, but I know that there are always exceptions.

Malcolm X An American Muslim Minister And Human Rights...

Malcolm X, born Malcolm Little and also known as el-Hajj Malik el-Shabazz, was an American Muslim minister and human rights activist. To his admirers he was a courageous advocate for the rights of blacks, a man who indicted white America in the harshest terms for its crimes against black Americans; disparagers accused him of preaching racism and violence. He has been called one of the greatest and most influential African Americans in history. Malcolm X was an orphan in his early life. His father was killed when he was six and his mother was sent to a mental hospital when he was thirteen, leading to him living in several foster homes. In 1946, when Malcolm was 20 years old, he went to prison for larceny and breaking and entering. While in prison, Malcolm X became a member of the Nation of Islam, and after his parole in 1952, rose to become one of the organization s most influential leaders, serving as the public face of the controversial group for a dozen years. In his autobiography, Malcolm X wrote proudly of some of the social achievements the Nation made while he was a member, particularly its free-of-cost drug rehabilitation program. In keeping with the Nation s teachings, he promoted black supremacy, advocated the separation of black and white Americans, and rejected the civil rights movement for their emphasis on integration. By March 1964, Malcolm X had become disappointed with the Nation of Islam and its leader Elijah Muhammad. Expressing many regrets about hisShow MoreRelatedMalcolm X Draft 21700 Words   |  7 PagesSocial Impacts of Malcolm X The Black Civil Rights Movement of the 20th century pushed for and achieved different levels equality through its many prominent activists. Prior to the movement, millions of Black Americans faced brutal abuse and segregation with little to no government action taking place against such wrongdoings. 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In his lifetime, from 1925 to 1965, he was known as an advocate for the rights of blacks, and has been named one of the greatest and most influential men in history. Early Life Malcolm was born on May 19, 1925, in Omaha, Nebraska to Louise and Earl Little. His Father, Earl, was a Baptist minister and an active member of the Universal Negro Improvement