Disney case Essay Example

Disney case Essay Example Disney case Essay Disney case Essay Executive Summary The Walt Disney company is based in Burbank, California and is a diversified international company. It is well known for its business divisions in entertainment motion picture, TV, consumer products as well as various real estate projects. In 1984, Disney and its subsidiaries posted outstanding results, as consolidated revenue increased by almost 27% to $1. 7 billion and net income increased 5% to $97. 8 million. In addition, Disney has also grown through acquisitions: assets have increased 15% to $2. 7 billion in 1984. In this case, we attempt to solve Disneys dilemma with Tokyo Disneyland. Tokyo Disneyland opened in April 1983 and Disney has been receiving pergola royalty receipts In exchange Tort use AT I TTS Dragon. I en problem Is Tanat Wendell ten royalty receipts are denominated in Yen, the Yen has been experiencing a trend of depreciation, which erodes the receipts values. Disney has begun work with Goldman to figure out the best way to hedge the exposure, as well as to acquire the cheapest cost of financing. Our analysis suggests that Disney should accept the method proposed by Goldman Cash, where it would issue an Echo-denominated bond and then enter into a currency swap. This would lower the cost of borrowing. Details of our analysis are presented in the rest of case. Introduction As indicated previously, the chief problem for Disney is how to hedge its exposure to a depreciating yen, which would decrease the value of the royalty receipts. As indicated in the case, in 1984 the spot Yen/$ rate is 248, which is almost an 8% depreciation from Just a year ago. To make matters worse, the receipts are expected to grow at 10%-20% per year over the next few years, which would further increase Disneys currency risk. There are numerous methods a company can hedge currency sis, such as through FIX forwards, futures and swaps. In particular, we will explore Goldman Cash proposed method way of entering into a foreign currency swap. This would create a Yen liability, which would allow Disney to pay out its Yen receipts and not worry about their depreciating value. Before we discuss the currency swap, lets first walk through all the options Disney has at its disposal. Disneys Options While there are many different methods of hedging, we should look into the cheapest option. We will look into methods such as 1) futures/options, 2) forwards, 3) WAP, 4) bank loan and, finally, 5) the combination of an ICE bond issuance a subsequent Acumen Swap proposed by Goldman Cash. 1) Futures/Options: FIX futures and options are the conventional methods of hedging, since they are market- priced and have high liquidity. The values of these futures and options contracts would theoretically offset gains losses of the Yen royalty receipts and thus hedge currency risk. Unfortunately, according to the case, the liquid options and futures contracts only existed for maturities of two years or less. This would not work out for Disney, which would need hedging for receipts beyond Just two years. 2) Forwards: The other method to hedge would be forwards. Forward options are not exchange- traded and are thus much less liquid. This can be observed via the Bid/Offer chart in the case, which provides rates for Yen Long-Dated FIX Forwards. The liquidity can be seen through the wide Bid-Ask offer spread, especially in longer maturities (e. G. Spot spread is 90 basis points, versus 460 basis points for 5-Year contract). Clearly, Forwards suffer the same liquidity problem as Futures/Options: only short-term trusties have acceptable rates, but Disney needs medium to long term hedges. Not to mention, FIX Forwards would be perceived by banks as risky and thus tie up Disneys credit lines, which are needed for daily operations. 3) Foreign-currency Swap (Swap Only): On the surface, this would work in Disneys favor because it can be customized to cater to Disneys needs (e. G. Longer maturity). Its also a method it has attempted before, in the previous year. Unfortunately, the swap would also only be short-term, since the current Arteriolar debt on Disneys balance sheet all mature in en to four years. Disney also believes that attractive swap rates for maturities less than four years were hard to find in the market. In addition, due to Disneys most recent Arteriolar issuance and high Debt/Equity ratio, Disney could not issue a long- term Arteriolar Dona (ten market would flew It negatively). Not to menthol, a swap would not provide additional funds to Disney, as it would only swap the interest payments. Disney was looking for additional funds to pay down some of its short- term liabilities the swap alone would not accomplish this goal. 4) Bank Loan from Japanese Bank: The other alternative would be to borrow directly from a Japanese bank at its prime rate. This would create a Yen liability, which would be paid using the royalties Disney receives from Tokyo Disneyland. This would rid Walt Disney of its Japanese receipts and hence reduce its exposure to a depreciating Yen. If Walt Disney were to pursue this option, it estimated it could borrow at a rate of 7. 50%, paid semi-annually. This option would not only hedge currency risk, but also provide funds needed to pay down Disneys short-term liabilities. 5) Goldman Cash Method ICE Debt Issuance Acumen Swap: Goldman Cash believes that while a Japanese bank loan could possibly work, an even better option would be an ICE issuance combined with an Client Swap. The ICE proceeds would be converted into dollar to pay off some short-term liabilities, and the swap would allow Disney to create a Yen liability. This would accomplish two objectives: allow Disney to hedge against a depreciating currency as well as provide funds to reduce its debt. We now evaluate this option in more detail. Cost of Funding (Before Swap) The first step in our swap analysis is to find the Quality Spread Differential (SD). Disney should only enter the swap if it provides a benefit to both sides. A positive SD would indicate that the Swap would lower the cost of funding. Our analysis indicated a positive SD of 0. 82%, as shown in Exhibit 1. Here are the details on the specific numbers: Disney (Yen): As indicated in the case, Disney has the option of getting a term loan from a Japanese bank. It can obtain a 15 billion yen 10-year bullet loan at 7. 50% and front-end fees of 0. 75%. The debt cash flow schedule can be seen in Exhibit 2. The cost of yen of 7. 753% takes into account the front-end fee. Disney ECHO): If Disney were to acquire an ICE loan, it would have a cost of 9. 473%. The cash flow schedule (which includes periodic contributions to a sinking fund) is shown in Exhibit 2. Its important to note that the bond trades at a 25 basis point premium. Also, it has a dollar expense of $75,000. These two figures are taken into account when calculating the cost. French Utility (Yen): The French Utility companys debt schedule shows all current outstanding debt. The only Yen debt it has on its balance sheet has a YET of 6. 83%. This would be its cost of debt if it were to borrow Yen. French Utility (ECHO): The same debt schedule shows two ICE bonds one issued in 1982 and the other 1985. We will use the YET of the most recently issued bond of 1985, which has a YET of 9. 37%. Quality Spread Differential As previously stated, our analysis shows a positive SD of 0. 82%, which suggests a Swap would be ideal for both parties to lower borrowing costs. Most of the differential comes from Yen financing, where the difference was 0. 92%, versus 0. 10% for ICE financing. In terms of advantage, it appears that the French Utility company has an absolute advantage when it comes to financing in both currencies. This is because it has a lower cost of financing in both currencies. Disney, on the other hand, has a comparative advantage in ICE financing, since it has less of a disadvantage at 0. 10%. Our chart suggests that Disney should borrow in ICE and the French Utility should borrow in Yen (and subsequently swap the interest payments). This will take advantage AT Don companies comparative advantage Ana lower ten overall cost AT borrowing. Cost of Funding (After Swap) Using the provided swap cash flow schedule in the case, we can calculate the swap cost of funding. The assumption is that the exchange rates are constant: $/ICE f 0. 7420 and Yen/$ of 248. Disney (Yen Swap Cost): Since Disney is borrowing in ICE but paying Yen in the swap, we must first convert the ICE proceeds into Yen (Note: This is for calculation purposes only. In real life, as indicated in the case, Disney would convert the ICE proceeds into Dollars to pay off a portion of its short-term debt). A detailed calculation can be found in Exhibit 3. Once again, its important to note that the bond trades at a 25 basis points premium, has a 2% fee and a $75,000 fee (which must be converted from dollars to yen). This gives us a net Yen amount of 14,445,057,600. Our calculation gives us a yen swap cost of 7. 010%. French Utility (ICE Swap Cost): The French Utility company would be receiving Yen from Disney while paying ECHO. To calculate the cost of paying ECHO, we need to discount the Yen payments and convert it to ICE (again, for calculation purposes only). The resulting total prevent value would be the Year O proceeds. As shown in in Exhibit 3, the Poof the Yen payments is 14. 6 billion, which converts to 79. 296 million ECHO. Using the 79. 296 as the Year O proceeds and the subsequent ICE swap interest payments, we come up with an ICE swap cost of 9. 350%. BIG Fees: To calculate the fees received by BIG for facilitating the swap, we look at the last column in Exhibit 4. To calculate the fees, we took the difference between the ICE received by Disney and the ICE paid out by the French Utility Company. Our calculation shows that BIG will receive 50 million yen from years O to 6, and then decreasing by 10 million yen every year until year 10, when it will receive 10 million yen. Comparison: No Swap vs Yes Swap We review our cost of funding in Exhibit 5. As shown in the chart, it makes sense for Disney to enter the swap, because it would reduce its cost of funding. If Disney uses a swap, it would incur a borrowing cost of 7. 10%, which is 0. 7428% lower than if Disney were to not use a Swap. On the other hand, if the French Utility company uses a swap, it would incur a borrowing cost of 9. 35%, which is 0. 0202% lower than if it were to not use the swap. Our numbers show that the swap helps Disney more than it helps the French Utility company. For Disney, a lower cost of 74 basis points is a lot higher than French Utilitys saving on 2 basis points. Bene fits Liabilities of the Swap From our model, it appears that the swap would work best for Disney. However, there are undoubtedly risks involved with our model as well as the swap. We now discuss in detail some of the risks. Exchange Rate Risk: In our model, we held the exchange rate constant for 10 years: $/ICE at 0. 7420 and Yen/Dollar at 248. However, this is clearly not realistic, as currency fluctuation is bound to occur in the 10 year period. For Disneys purposes, the best situation would be if the Yen continues to depreciate. This would mean that Disney will pay out the same nominal amount, but the value of the payment would be less. Borrowing Cost Risk: In our model, to assess he Quality Differential Spread, we looked at current market rates as indication of future borrowing rates. However, given market fluctuations (e. G. Higher Treasury yields), the borrowing rate rate could very well change by the time of the Swap. This is especially true for Disney: given its string of acquisitions and rapidly increasing Dent to Equity rattle, now would ten market perceive another Dona Issuance? WSDL investors demand higher interest rates to compensate for the risks? Conclusion Based on our analysis, we recommend that Disney should accept the method reposed by Goldman Cash.

Call vs Put Options Essay Example | Topics and Well Written Essays - 250 words

Call vs Put Options - Essay Example Again, they are guaranteed of no losses. Financial options are perhaps a better way to attract investors in stock companies and encourage them to invest. However, I think because they are not ready to take risks with their shares they could be at a disadvantage if their stocks are bought or sold at higher values other than the agreed upon values. In my opinion, financial options can be good or bad. The buying contracts reduce risks in the event of a negative outcome. The buyer is somewhat protected while the trader increases gains and reduces losses. This is especially important given the volatile nature of the stock market as affected by issues such as fluctuating interest rates, exchange rates, and other market forces. Perhaps a major disadvantage of the two options is losing part of, or the whole contract price. Again, there is the risk of broker insolvency or non-fulfillment of contractual

Consumer Mathematics Speech or Presentation Example | Topics and Well Written Essays - 250 words

Consumer Mathematics - Speech or Presentation Example Some common variants of traditional savings accounts are; passport savings, money market accounts. Although passbook savings is one of the most widely used since it stipulates few restrictions and withdrawals are usually not limited; consequently they are typically low yielding alternatives to other types of accounts. Interest can be compounded daily, weekly or monthly so it pays to calculate actual yield based on terms and all transactions are recorded. Money market accounts provide a more attractive alternative to passbook accounts, since they are usually higher yielding, provide the ability to write checks, and are subject to certain restrictions. Some disadvantages are that they are typically subject to fairly high minimum balance requirements in order to avoid fees and usually restricted to six withdrawal transactions, three must be done by check. Certificate of deposit provides the most attractive alternative as an investment instrument. Certificates of Deposit provide the high est interest return and are virtually risk free due to the fact that they are insured by the FDIC. The deposits are usually of a fixed term, with maturity ranging often three months, six months or from 1-5 years. Interest is usually fixed, with longer term CD’s usually offering a higher yield. The main disadvantage lies in the fact that early withdrawal is heavily penalized, thus the investor must be aware of this fact because the principal is held until

Indigenous peoples in Australia Essay Example for Free

Indigenous peoples in Australia Essay Indigenous Peoples of Australia is categorized into two groups namely, the Aboriginal People and the Torres Strait Islanders (Sharp). Aboriginal peoples are said to be the group of IP’s, who became the first settlers in mainland Australia. The Torres Strait Islanders are the ones who are originally the inhabitants of the region between Australia and New Guinea. Indigenous Australians include a very diverse communities and societies across the whole Australia. Studies and researches show that there is an approximately 200 languages that are native to the Indigenous Australians and 20 of these languages are still being spoken up to now in Australia (Sharp). The majority of the Indigenous Australians resides in the south east near the Murray River. Indigenous Peoples in South Africa The African region has been termed as home for the majority of indigenous peoples (Clark). North and South Africa are comprised of indigenous communities which are also divided into several subgroups. Though hunting, gathering and pastoral means are the most basic means used by the indigenous peoples in Africa, some indigenous communities have already learned the agricultural system. As mentioned, the diverse indigenous communities in both North and South Africa are grouped not on the basis of their chronological subsistence but on the basis of their common characteristics in terms of cultural inclinations and lifestyle. Mining Operations in Australia and South Africa South Africa and Australia rank second and third respectively as the world’s top producers of gold (Indigenous Community Organisations and Miners, 2007). While gold is the second outstanding export product of Australia, it is the biggest export product of South Africa. It is undeniable that mining in both Australia and South Africa helps the two in advancing and maintaining good economic standings. However, other issues like human rights violations have been reportedly committed because of the mining operations in South Africa and Australia. On the other hand, South Africa and Australia have different cases in terms of the developments regarding the alleviation of human rights violations through mining operations. In Australia, the government devises a strategic approach which aims to reconcile the mining companies and the indigenous peoples (The Mining Ombudsman, 2007). As part of the Corporate Social Responsibility of the mining companies, they are obligated by the law to come up with humanitarian programs that which are directed towards the promotion of the welfare of the indigenous peoples in Australia. Mining companies conducted seminars, conferences and workshops that which enables the indigenous peoples know how mining projects operate and how could they help the indigenous peoples improve their everyday living. Through these programs and projects, the rights of the Indigenous Australians are being upheld in such a way that they are set towards progress and development together with the mining corporations. However, in the case of the mining operations in South Africa, there is a lack of consideration given to the indigenous peoples. The mining companies in South Africa have been reportedly accused of exploiting the natural resources within the habitats of the indigenous peoples in South Africa (Communities take shine off, 2006). Environmental degradation, displacement of the indigenous peoples from their residences, and health hazards brought about by the mining operations are among the issues raised by the indigenous communities (Communities take shine off, 2006). Their rights as people are being neglected in such way that the mining activities cause harm on their part. Many forests are deforested and the wild life is severely threatened. It is to be noted that most of the indigenous peoples in South Africa live on uplands as well as near forests. The destruction of these forests signals the destruction of their homes too. Thus, in order to safeguard their rights for these natural resources (as their homes and source of food and others), protection and preservation of the environment should also be considered by the government as well as the mining corporations. In addition, there is also a treat to the health of the indigenous peoples caused by the toxic and other wastes products that are being secreted during mining activities (Communities take shine off, 2006). Water contamination and lead poisoning are some of the health hazards that are caused by mining. Lastly, cultural degradation is also said to occur in indigenous communities because mining devastates certain sites which are sacred and ceremonial for the indigenous peoples. Conclusion Though, mining serves the economic growth of Australia and South Africa, it does not change the fact that it brings certain disadvantages towards the people particularly on the indigenous peoples. The main difference between the impact of the mining operations on the indigenous communities in Australia and South Africa is that in Australia the government and the mining companies are aware of the fact that they should consider the well-being of the indigenous peoples whereas in South Africa the government and the mining corporations lacks awareness and cooperation to resolve the conflict between the indigenous peoples and the mining operations. Works Cited Maybury-Lewis, David. Indigenous Peoples, Ethnic Groups, and the State. Second ed. Allyn and Bacon, 2001. Sharp, Anne. Indigenous Peoples of the World – Australia. First ed. Lucent Books, 2002. Clark, Domini. South Africa the People. Crabtree Publishing Company, 1999. â€Å"The Mining Ombudsman. † 2007. Oxfam Australia. 09 November 2007 http://www. oxfam. org. au/campaigns/mining/ombudsman/. â€Å"Indigenous Community Organisations and Miners: Partnering Sustainable Regional Development. † 14 February 2007. The Australian National University. 09 November 2007 http://www. anu. edu. au/caepr/mining. php. â€Å"Communities take shine off platinum players in South Africas Bushveld. † 19 May 2006. Mines and Communities. 09 November 2007 http://www. minesandcommunities. org/Action/press1099. htm.

Reducing Symptoms in Bulimia Nervosa and Binge Eating Disorder Through

Reducing Symptoms in Bulimia Nervosa and Binge Eating Disorder Through Drug Treatment Bulimia nervosa is a chronic psychiatric disorder that haunts the lives of many young women. The disorder is characterized by frequent episodes of binge eating followed by some sort of purging. The purging usually involves self-induced vomiting and can cause great damage to the body. Persons diagnosed with bulimia nervosa have a loss of control over these behaviors. Affecting the lives of 3-5% of young women, bulimia is a problem that is spinning out of control and nothing seems to be able to stop it. Binge eating disorder is another psychiatric disease that causes problems for many people. In this disorder, persons binge frequently but do not attempt to compensate for their eating by using purging techniques such as those used by persons suffering from bulimia nervosa. There are many types of treatments that attempt to mitigate the symptoms of bulimia and binge eating disorder. But what causes the binges in binge eating disorder and what causes the binge-purge cycle in bulimics? How can the symptoms of these disorders be reduced or eliminated? If the causes of these behaviors are discovered, the behaviors can be reduced. There are several therapies that have proven to be fairly effective in treating persons diagnosed with bulimia nervosa. Drug therapy has made great advances in recent years and goes straight to the root of the problem. Drug therapy attempts to uncover the biological causes of the symptoms of bulimia nervosa and binge eating disorder. A discovery made recently found that there is an inverse correlation among women with bulimia between the frequency of binge-eating and cerebrospinal fluid concentration of the major ser... ...very effective. This manual should be researched and developed further because not only can people educate themselves, but therapists can have more time to focus on deeper problems and on patients who do not respond well to such therapies. Works Cited Hartman, Boyd K., Faris, Patricia L. Treatment of Bulimia Nervosa With Odansetron. Archives of General Psychiatry. 1997; 54: 969-970. Hudson, James I., McElroy, Susan L. Fluvoxamine in the Treatment of Binge-Eating Disorder. The American Journal of Psychiatry. 1998; 155: 1756-1762. Rissanen, Aila., Naukkarinen, Hannu. Fluoxetine Normalizes Increased Cardiac Vagal Tone in Bulimia Nervosa. Journal of Clinical Psychopharmacology. 1998; 18: 26-32. Treasure, Janet., Schmidt, Ulrike. Sequential Treatment for Bulimia Nervosa Incorporating a Self-Care Manual. The British Journal of Psychiatry. 1996; 168: 94-98.

How national and local guidelines affect day to day work Essay

National and local guidelines, policies and procedures for safeguarding that affect a practitioner’s day to day work relating to; Childcare practice The Education Act 2002 poses a duty on education authorities to promote and safeguard the welfare of children and young people. This affects my day to day work as I must be aware of the child protection procedures at all times, such as how to spot the signs of abuse, how and who to report my concerns, how to maintain a safe school environment, be aware of the health and safety of children and to be able to undertake any training required of me. Child Protection In my settings policies and procedures for safeguarding it states that all employees, volunteers and students should be properly vetted, which includes checks into the eligibility and the suitability, and that crb checks should be carried out. If I didn’t produce a crb check to make sure I didn’t have any criminal convictions or to check my suitability to work with children and young people then I would not be allowed to work in my setting. Risk assessment Risk assessments are an important factor in safeguarding children and in my day to day work, before I carry out any activity with children and young people I am required through my setting policies and procedures to carry out a risk assessment first to make sure all involved is safe, for example, if I were to plan an activity, such as an art and craft activity I would need to risk assess the potential danger of scissors, small objects, i.e beads and amend my plan accordingly to suit each individual. Ensuring the voice of the child or young person is heard Advocacy safeguards children and young people and protects them from abuse and poor practice. The government developed national standards for advocacy practice to ensure that children are able to speak out and have their views heard. The national Standards for the provision of children’s advocacy 2002Â  is this standard. This affects my day to day work as I need to know how to access advocacy services should a child require it and a child can request that I act as an advocate for them and in that case I will need to know where to look for support from the advocacy services. Supporting children and young people and others who may be expressing concerns Following my settings policies and procedures, if a child or young person were to express any concerns I would in my day to day work show a child that I am taking them seriously, that I am here to listen and have empathy, I would reassure the child that I will help in any way I can, I would record the conversation following the correct procedure, I would not make promises, or say that what has been discussed is confidential, I will not come to my own conclusions or ask questions and I would seek support and advice from the designated child protection officer.

Formal and Non Formal Education - Free Essay Example

Sample details Pages: 3 Words: 752 Downloads: 1 Date added: 2017/09/11 Category Advertising Essay Did you like this example? Education  in the largest sense is any act or experience that has a formative effect on the  mind,character  or physical ability of an individual. In its technical sense, education is the process by which society deliberately transmits its accumulated  knowledge,  skills  and  values  from one generation to another. Etymologically, the word education is derived from  educare  (Latin) bring up, which is related toeducere  bring out, bring forth what is within, bring out potential and  ducere, to lead. Don’t waste time! Our writers will create an original "Formal and Non Formal Education" essay for you Create order 1] Teachers  in educational institutions direct the education of  students  and might draw on manysubjects, including  reading,  writing,  mathematics,  science  and  history. This process is sometimes called  schooling  when referring to the education of teaching only a certain subject, usually as professors at institutions of  higher learning. There is also education in fields for those who want specific  vocational  skills, such as those required to be a pilot. In addition there is an array of education possible at the  informal level, such as in museums and libraries, with the Internet and in life experience. Many non-traditional education options are now available and continue to evolve. Formal and Non Formal Education  has basic differences. Formal education is classroom-based, accompanied by trained teachers. Informal education happens outside the classroom, in after-school programs, community-based organizations, museums, libraries, or at home. Both formal and informal education settings offer different strengths to educational outreach project. After-school programs offer a different kind of environment, where ones activities dont need to be as formal and once can easily reach the audience. While both schools and after-school programs serve students, at school blossom in after-school settings. Real learning can happen in a setting where kids feel less intimidated or more comfortable than they do in a formal classroom. Education  is about teaching and learning  skills  and  knowledge. Education also means helping people to learn how to do things and encouraging them to think about what they learn. It is also important for educators to teach ways to find and use information. Through education, the knowledge f  society,  country, and of the  world  is passed on fromgeneration  to generation. In  democracies, through education,  children  and  adults  are supposed to learn how to be active and effective  citizens. t is part of the job of an  educator, an instructor,  teacher, or  tutor  to create a place for learning. There are many  different  kinds of education. Formal education Formal education is usually in  school, where a pe rson may learn basic, academic, or  trade  skills. Formal education begins in  elementary school  and continues with  secondary school. Post-secondary education (or higher education) is usually at a  college  or  university. Nonformal education Nonformal education is sometimes called adult  basic  education, adult  literacy  education or school equivalency preparation. In nonformal education an adult (or a youth who is not in school) can learn literacy, other basic skills or job skills. Nonformal education can be in small classes or through self study. [nformal education There is also informal education. For example, a parent teaches a child how to prepare a  meal. Someone can also get an informal education by reading many  books  from a  library. Informal education is when you are not studying in a school and dont use another particular  learning method. This article presents a conceptual framework for understanding the interrelationships among formal, nonformal and informal education. It provides a typology of modes of education across the life span, from childhood to old age. The nonformal education mode is the focus of the article as examples of programs for differing ages, sexes, social classes and ethnic groups are discussed. The third section of the article raises questions regarding the relationship between nonformal education for individual and social change within and across cultural and socio-economic groups. It also discusses the relationship between nonformal and formal education relative to their respective scope and outcomes. The author argues that educational resources must be viewed as interacting modes of emphasis rather than as discrete entities. Hence, all individuals are engaged in learning experiences at all times, from planned, compulsory and intentional to unplanned, voluntary and incidental. It is also argued that nonformal education may be more strongly associated with socio-economic, sex and ethno-religious groups than is formal education. Because of these strong socio-economic and cultural ties, the utility of nonformal education for social, as opposed to individual, change is often restricted. The value of nonformal, as opposed to formal, education for access to the opportunity structure for low socio-economic status populations is also questioned because of the greater legitimacy typically associated with schooling.