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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?
2. Assuming a hedge is desirable what hedging techniques available to the treasure? What are the advantages
and disadvantages of each?
3. In light of the various other techniques for hedging currency exposures why the market for currency swap does
exists? Who benefits and who looses in such an agreement? Can a swap really create value for a corporation? And if
so where does the value come from? What risks does the swap carry for the various parties involved?
4. Evaluate Goldman’s proposal for an ECU bond issue accompanied by ECU/Yen swap. How does it “all-in” yen cost
compare to that of the proposed yen term loan? Is it super to hedge in outright forwards?
what time period?
2. Assuming a hedge is desirable what hedging techniques available to the treasure? What are the advantages
and disadvantages of each?
3. In light of the various other techniques for hedging currency exposures why the market for currency swap does
exists? Who benefits and who looses in such an agreement? Can a swap really create value for a corporation? And if
so where does the value come from? What risks does the swap carry for the various parties involved?
4. Evaluate Goldman’s proposal for an ECU bond issue accompanied by ECU/Yen swap. How does it “all-in” yen cost
compare to that of the proposed yen term loan? Is it super to hedge in outright forwards?
| The Walt Disney Company's Yen Financing, Harvard Case Study (HBS) |
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group presentation of the answer (powerpoint - 23 slides),
the solutions to the questions below (word), the financial
spreadsheets to support the solution (excel), and then a
2nd solution based on class discussions after the case
was presented (powerpoint - 49 slides). If you are
interested in purchasing this solution, you can pay via the
PayPal link below, the solution will be made available for
downloading immediately. If you have any questions, you
can reach me at Case.Study@cpa-cfa.com
