Unformatted text preview: rable regulated utilities as
Use
in Exhibit 10… Question 2: Valuation of PacifiCorp
Question
Summary of PacifiCorp valuation estimates from Exhibit 10:
Enterprise Value as Multiple of:
Rev. EBIT EBITDA MV Equity as
Multiple of:
EPS Book
Value Median multiple of comparables 6,252 8,775 9,023 4,277 5,904 Mean multiple of comparables 6,584 9,289 9,076 4,308 5,678 How does Berkshire’s offer compare to the range of
How
values? Question 2: Valuation of PacifiCorp
Valuation But it will take 12 to 18 months for the deal to close… What is the present value of Berkshire Hathaway’s cash
What
present
payment (assume $4.3B in securities is the present value) ? What is the appropriate discount rate?
What
discount Is there sufficient information to calculate the cost of equity capital?
Is Is there sufficient information to calculate the cost of debt capital?
Is Berkshire has very little debt – how risky is it? Questions 2 and 3: Valuation of PacifiCorp
Questions What is an appropriate discount rate?
What The PV of $5.1B one year hence is
The
$5.1B Es...
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 Fall '14
 Accounting, Berkshire Hathaway, Warren Buffett, Warren E. Buffett

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