Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
The company
had an average of 20.3% annual growth. It can be seen that
Berkshire’s year end closing share price was $102 in 1997 and on
May 24, 2005 the share price reached $85,500 which had one of the
highest on the stock exchange. This is the significant growth over the
years. Data in the case and case Exhibit 6 give information with
which to perform a simple analysis of Berkshire’s return on
investment in MidAmerican. Beginning in 2000, Berkshire Hathaway
made an outlay of $1.642 billion for an eventual 80.5% economic
interest in MidAmerican. Berkshire’s economic interest in
MidAmerican was composed of both equity and debt investments
such that the cash flows to Berkshire included interest payments,
common dividends, and preferred dividends. Therefore,
MidAmerican’s free cash flows, the cash flows available to all debt
and equity claims. With regards to the investment in MidAmerican
Energy Holdings, they experienced a loss of revenue in 2004 as it fell
to 170 million while the prior year they had revenue of 416 million.
Therefore it can be expected that the acquisition of PacifiCorp will
increase the revenue in the next year.