1988 Valuation of Coca-Cola by Bud Labitan,Scott Thompson

By Bud Labitan,Scott Thompson

For years, we've questioned how Warren Buffett valued Coca-Cola, (Ko), inventory at one of these deep cut price in 1988. This publication describes an easy level discounted money circulate version that can provide a detailed approximation. This workout is our quantitative estimation of Coca Cola's Intrinsic worth consistent with proportion in 1988. First, we describe our 2-stage "discounted money movement" valuation version. given that intrinsic worth is a hugely subjective determine, readers can modify their version to the standard of the company they need to price. KO is now at $41/share... are looking to examine a historic valuation that now yields an eighty five% in line with 12 months go back to Berkshire Hathaway? ( capital appreciation + dividends / purchase-adjusted-price of $3.25 ) that's the mystery of compounding in a top quality company like Coca-Cola. the assumption is to examine KO as a bond and observe the fundamental math of "Yield On rate" or "Yield in step with share_cost."

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