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What is the possible meaning of the changes in stock price for Berkshire Hathaway and the target company on the day of the announcement? Specifically, what does it imply about the intrinsic value of the target.

2. Based on the multiples for comparable companies, what is the range of possible values for the target company? What concerns do you have about this method of valuation?

3. Based on #2 and other information in the case or elsewhere (in the supplemental spreadsheets or in the financial press, for example), has Buffett overpaid for this investment or did he get a bargain? (Explain and cite your references.) In other words, should BRK shareholders approve the deal?

4. Identify two elements of Buffett's investment philosophy with which you strongly agree or disagree and defend your position on each.

5. Financial news articles frequently describe Buffetts success stories as a value investor. Buffett purchased 25 million shares of Coca Cola (KO) early in 1988 after KOs price had been hammered by the market crash of October 87 and the New Coke marketing fiasco. Despite the prospect of slower growth owing to consumer health concerns about sugary drinks, Buffett has continued to hold his original stake (split four times) to this day. (One reason might be that he has a Coke every morning with his McDonalds Egg McMuffin and likes to have a few more during the day!). How has this investment performed for him? Use the Excel template, where I have supplied dividend and price data (adjusted for the splits), to calculate the internal rate of return or yield on this investment. How would you evaluate the success of this investment?

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