Warren Buffett’s Berkshire Hathaway Com-pany went public in 1965. The public offering price was $18 per share. The stock was trading at $190,500on July 1, 2014, and the market value of the firm was$304.8 billion.(a) What is the firm’s average annual compoundgrowth rate over last 49 years?(b) If Mr. Buffett’s company continues to grow at the historical growth rate, what will be his com-pany’s total market value when he reaches the age of 100? (Buffett celebrated his 83th birthdayin 2014.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Warren Buffett’s Berkshire Hathaway Com-
pany went public in 1965. The public offering price

was $18 per share. The stock was trading at $190,500
on July 1, 2014, and the market value of the firm was
$304.8 billion.
(a) What is the firm’s average annual compound
growth rate over last 49 years?
(b) If Mr. Buffett’s company continues to grow at

the historical growth rate, what will be his com-
pany’s total market value when he reaches the

age of 100? (Buffett celebrated his 83th birthday
in 2014.)

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