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Pastimes : Austrian Economics, a lens on everyday reality

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To: LLCF who wrote (22)	12/6/2001 1:40:46 PM
From: Don Lloyd	Read Replies (2) of 445

DAK - , it seems to me that in your example, Warren would pay current shareholders a lower price per share [by 2 million / number shrs out] in either example. It matters not whether the company has actually paid out cash, or paid out stock.... This may or may not be right, but you've stopped short of answering the real question. If no bonus at all is paid, Warren will pay $100M for the entire company. If a $2M bonus is paid out in cash, he will then pay $98M for the entire company. How much will he pay for the entire company in total after the bonus is paid out as new stock worth $2M at current prices? Regards, Don

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