Berkshire Hathaway Inc (BRK.B)
Warren Buffett has said that Berkshire Hathaway would buy its own stock at a price of at or below 1.2x book value. Seeking Alpha contributor Hidden in Plain Sight ponders whether tax reform will push Buffett to raise his buy-back threshold above 1.2x book value. After examining how a 20% tax rate would impact Berkshire’s investment investment portfolio and operating businesses, the author concludes that Berkshire’s book value could reach around $147 at the end of the year. A faster growing book value plus over $100bn in cash may compel Buffett to raise his buy-back threshold to 1.44x book value.
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