MrB Posted November 28, 2011 Share Posted November 28, 2011 Analysis question. If you did a sum of the parts analysis for a co like Berkshire, Fairfax, etc. Would you then capitalize head office cost? If so then at what rate and why? Link to comment Share on other sites More sharing options...
beerbaron Posted November 29, 2011 Share Posted November 29, 2011 What you mean the 0.01% annual cost for the headoffice? BRK and FFH are the worst examples to try to discount their HQ costs, they are so decentralized that they can run as slim. I don't think the Conglomerate discount applies to those companies. BeerBaron Link to comment Share on other sites More sharing options...
MrB Posted November 29, 2011 Author Share Posted November 29, 2011 I just used those companies as an example of the structure. I'm looking at a much smaller company and in a valuation report the cap head office costs actually end up being 10% of the EV. However, I am not sold on the logic of the idea, which is what my questions are aimed at. Link to comment Share on other sites More sharing options...
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