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Buffet that GEICO was positioned as an ideal candidate for ownership by Berkshire Hathaway Investment.
Year 0 1995 purchase -2300 1 -2300
Year 1 1996 dividend $1.16 39.06 0.94 36.7164
Year 2 1997 dividend $1.34 45.12 0.88 39.7056
Year 3 1998 dividend $1.55 52.19 0.82 42.7958
Year 4 1999 dividend $1.79 60.27 0.77 46.4079
Year 5 2000 dividend $2.07 69.7 0.72 50.184
Year 5 2000 share $125 4209 0.72 3030.48
NPV 936.47
But to make sure that his calculations were correct we would have to assume that eventually the stock would rise to $125 per share thereby giving a NPV of $936.47. Either way this investment strategy proved beneficial for shareholders...
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Common topics in this essay:
- Warren Buffet
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- Some people think that governments should spend large amounts of money to explore outer space. Others think that this money should be used to improve life on earth
- ?§Money is the only thing that really motivates people??. Discuss.
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