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代写coursework-关于迪斯尼的跨文化管理INTERCULTURAL MANAGEMENT-An analysis of the Disney Company

Name：Xia huan
Student ID: 2220110460

Beijing Institute of Technology
December 12, 2011
 
An analysis of the Disney Company
1. Backgroud
Due to past depreciation in the yen, Disney has decided to consider hedging future yen royalties paid by Tokyo Disneyland. Disney can enter into a currency swap to capitalize on its comparative advantage to borrowing in its local debt market and therefore obtain interest rates more favorable than the French utility could hope to obtain. Each party then swaps the currency they could receive at lower rates and share in the overall benefit. Disney may also wish to hedge long-term foreign exchange exposures since future fluctuations of a currency can erode a project’s NPV to the point of rendering it unprofitable. Furthermore, Disney could have reached the limit of their borrowing capabilities and are looking for a way to borrow more. It is an indirect way of going into capital markets to obtain a desired currency.
Both Disney and the French utility have the opportunity of obtaining loans with lower overall costs. They can also convert fixed-rate debt into floating-rate debt (or vise versa) to better match revenue streams. IBJ can benefit from this arrangement through commissions and fees. As currency swap activity increases, the revenue generated from this activity has become significant. The swap bank also benefits when it pays out less than it receives from each counter party to the other counter party.
Currency swaps are off-book transactions since they do not appear on a balance sheet as assets or liabilities. Although appearing as a footnote in the financial reports, this method of borrowing can elude all but the very thorough examinations. Disney and the French utility will realize benefits when they can match debt to revenues in the same currency. The avoidance of exchange-rate fluctuations can often green light a project in a foreign country. Companies are able to lock in long-term exchange rates, often beyond what banks are willing to quote, through the repayment of debt service obligations denominated in a foreign currency. This flexibility is valuable to firms with foreign currency revenue streams. Swaps create value for a company when structured in a way where the total cost is lower for both parties. The companies can then use the funds saved through swaps for further investments in positive NPV projects.
The following risks are inherent to the Industrial Bank of Japan:
Interest Rate Risk—This risk results from unfavorable changes in interest rates before the dealer has the chance to identify and secure the counter party (other side) of the currency swap.
Basis Risk—This comes from the floating rates of the two counter parties whom are pegged to differing indices. If the indexes are not correlated, the swap bank could be faced with a shortage of floating rate funds when passing from one side to the other. The bank’s spread could shrink or they could even incur a loss.
Exchange Rate Risk—This risk relates to the risks the swap bank manages from fluctuating exchange rates from the time the bank accepts one side of the swap to the time the bank finds another interested counter party. Any exchange rate changes are focused on the swap bank.
Credit or Default Risk—Swap banks also face this type of risk as companies go out of business or have bad tim本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。