1. Should Disney hedge its yen royalty cash flow? Why or why not? If so‚ how much should be hedged and over what time period? Yes‚ Walt Disney Company should hedge its royalty cash flow to protect against currency fluctuations. The company has revenues in Yen and does not have expenses in Yen. Thus it would be converting the Yen to Dollar and so is exposed to foreign exchange risk. The value of Yen has declined recently and it is difficult to forecast what the value could be in the future
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CASE STUDY THE WALT DISNEY COMPANY’S YEN FINANCING Alexandra Molnár Laure Vigneron Manuel Aguilee Pimprapai Lertamornkitti Pranav Goyal EXECUTIVE SUMMARY Walt Disney‚ an American leisure and entertainment company‚ receives royalty payment from Tokyo Disneyland every year. The royalties were denominated in yen and were constantly growing and becoming significant for the company (8 billion Yen in 1984‚ with 10-20% projected growth). However‚ the depreciation of the yen against the dollar could
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Introduction: The Walt Disney Company is the largest media conglomerate in the world and is headquartered in Burbank‚ California‚ USA. It was established by Walt and Roy Disney in 1923. Since its inception‚ Disney has grown vastly so that operational areas now include theme parks‚ motion pictures‚ television dramas and consumer products. In 1955‚ the most charming place in the world was ‘Disneyland’ was open for the public. The idea was to create a magical place for the whole family. Ever
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The Walt Disney Company’s Yen Financing Report Contents Overview 3 History of Disney 3 Analysis on Financial Statement 3 Problems to Solve 4 Variable methods of hedging 5 Inter FX Forward Contracts 5 Goldman’s Proposal 7 Gains for Both Counterparties 10 Conclusion 11 The Walt Disney Company’s Yen Financing Report Overview History of Disney The Walt Disney Company (NYSE: DIS)‚ commonly referred to as Disney‚ is an American multinational diversified mass media company
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The Yen In only 142 years Japan’s economy changed from an antiquated monetary system to the world’s third most traded currency and forth most used reserve currency after the U.S. dollar‚ the euro‚ and the pound sterling. Truly the Japanese Yen is still an unappreciated economic force waiting for it’s chance to take center stage on the world market. CREATION OF THE YEN The Yen came into existence May 10‚ 1871 after the Meiji government chose to abandon Tokugawa coinage
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eThe gap between rich and poor Wife Swap is an American TV show in which two mothers/wives from completely different social classes or lifestyles switch houses and families for two weeks. The show is a way of revealing the diversity of American values and lifestyles and sometimes it may be a shock to cope with people who differ culturally and socially. In this way‚ Mark Beauvais and Steve Clayton represent two completely different social classes‚ which can be identified in their economic situation
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Understanding Asset Swaps Learning Curve Richard Pereira September 2003 2 Asset swaps Asset swaps combine an interest-rate swap with a bond and are seen as both cash market instruments and also as credit derivatives. They are used to alter the cash flow profile of a bond. The asset swap market is an important segment of the credit derivatives market since it explicitly sets out the price of credit as a spread over Libor. Pricing a bond by reference to Libor is commonly used and the spread over
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In-arrears swap Also known as a delayed reset swap‚ an in-arrear swap is an interest rate fixed for floating swap that has its floating leg that pays at the regular payment date a rate that has just reset (usually that has reset two business day ago for Euro JPY and USD swap and that has just reset for GBP swap). In the case of swap paying every six months‚ the reset rate at the payment date would be fixed six months and two days ago in a regular swap only two days ago in the in-arrear version
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Financial Management Review on Swaps‚ Solution 1. The term interest rate swap A. refers to a "single-currency interest rate swap" shortened to "interest rate swap" B. involves "counterparties" who make a contractual agreement to exchange cash flows at periodic intervals C. can be "fixed-for-floating rate" or "fixed-for-fixed rate" D. All of the above 2. Suppose the quote for a five-year swap with semiannual payments is 8.50—8.60 percent. The means: A. The swap bank will pay semiannual fixed-rate
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Hello everyone‚ this is (YOUR NAME) here with the (X – 1st‚ 2nd‚ 3rd…) entry in the company review interview in my new blog series here on YOURWEBSITE.com. I’m here with (INTERVIEWEE NAME) a partner in XYZ COMPANY. So since you’re here looking for more information about this company‚ this interview is going to provide you with an insider’s perspective of XYZ COMPANY and also give you further information about XYZ COMPANY so you can make an educated decision about joining the XYZ COMPANY. So let’s
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