Berkshire Hathaway : An American Multinational Conglomerate Holding Company Essay

856 Words4 Pages
Background Berkshire Hathaway, an American multinational conglomerate holding company, owns a multiple of sub-companies. Managing and hold huge assets, Warren E. Buffett, a investor who needs little introduction as well as the CEO of Berkshire Hathaway, is regarded as one of the most successful and richest businessman. It wholly operates the GEICO, BNSF, Lubrizol, Dairy Queen, Fruit of the Loom, Helzberg Diamonds, FlightSafety International, and NetJets. Introduction Reviewing the performance of the Berkshire Hathaway in last three months, I target to analyze the recent performance with these dimensions: dividend policy, WACC, stock price, SWOT, and ratios. Moreover, I pay attention to and relate the recent performance of the case company to the aspects listed above. Dividend policy As the CEO of the Berkshire Hathaway, Warren Buffet believes that paying a dividend is not the most auspicious way to distribute the earnings, while paying a dividend has less value than reinvesting for the shareholders. Ordinarily, the reinvestment indicates a risk for the company, and most of investors tend to directly earn the dividend. Buffet, however, prefers to extend to invest for earning more profits during a long-term period, which is considered as a high-return trade-off with assuming a higher-risk. Alternatively, Berkshire Hathaway allocates incomings directly to shareholders by its generous stock buybacks, which benefits stockholders from allowing them to receive more bonus than

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