1. How would you value the Hong Kong Disneyland project from the perspective of Walt Disney?
The valuation of Hong Kong Disneyland from the perspective of Walt Disney is done by taking the following assumptions:
Cost of Capital = 9.52%
Cost of Government Debt = 8.19%
Cost of Commercial Bank Debt = 11.36%
Cost of Equity = 12.3% (10 year average)
Inflation = 7.31% (10 year average)
Gross margin = 37%
Operating Cost = 22%
Variable Management Fee = 5%
With the above assumptions the FCF of the project and the Royalties that Walt Disney would get were calculated by projecting the Cash Flows till 25 years.
The NPV of the project was found to be HKD1774million and the revenues to Walt Disney are HKD3834.51million.
2. How much
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However the techniques would not take into account the risks fully. Risks like political risk, technical risk are not taken into account while estimating the future cash flows. Hence while the project evaluation techniques are instrumental in evaluating a project, there are still some aspects about the project which are not fully covered in these techniques.
5. How does the attractiveness of the project vary under different economic scenarios and financing arrangements?
Similar to the question number 2
6. Should the Government pay to lure Disney to Hong Kong? If so, at what price?
From the assessment of additional benefits by way of increased spending of tourists as well increased number of tourists, the economy is getting an additional HKD 540 billion from this venture. Apart from this there are employment opportunities that are created directly and indirectly.
Disney inturn is asking for free land as well as tax benefits in line with its earlier theme parks at Paris and Tokyo. Land premium to be charged by the Government is HKD 4 billion and the tax holiday for 10 years comes to HKD 363 million. Weighing the costs and benefits to the Government and economy as a whole, the Government can provide both the benefits asked by Disney. However due to the high political risk associated with providing free land, the Govt. can atleast provide tax breaks.
Hence it is advisable to the Government to lure Disney with the tax breaks the company has
Disney is a lie. Why? This corrupt company brainwashes consumers into handing over their hard-earned money in order to purchase overpriced merchandise, all while under a facade of innocence and happiness. Fairy-tale endings and a cheerful mouse might represent Disney’s projected values, but underneath the exterior lay indicators of Disney’s corrupt ideals. Common people are deceived into handing over their hard-earned money to corrupt companies in order to purchase overpriced products. The power that these companies gain allows these businesses to control, to a certain extent, politics and influence political decisions. These companies will not hesitate to fire American workers in order to save a handful of dollars and stifle any trace of dissent. Therefore, large corporate companies should stop exploiting and manipulating consumers for profit.
DisneyLand has more than 14 million visitors a year. Disneyland makes close to 3 billion dollars a year. They do not sell peanuts or gum inside Disneyland. The mayor Charles Pearson didn’t want a dirty amusement park. Even though Disneyland was a big success Walt still was not satisfied. He knew he could do
As one can see in Exhibit 1 in (1), revenues under CEO Eisner had risen from $1,656 billion (1984) to astonishing $25,402 billion. Also, shareholder return increased dramatically. Disney’s stock value relative to the S&P500 (represent the overall performance of the stock market) went up from “1” ($100 million/$100 million) in 1984 to around “2,649” ($3,226 million/$1,218 million) in 2000. Thus, Disney under Eisner generated an amazing “26%” annual total return to shareholders (2).
Introduction The Walt Disney Company is an American diversified multinational mass media corporation. It is the largest media conglomerate in the world in terms of revenue. It generated US$ 42.278 billion in 2012. Disney was founded on October 16, 1923, by Walt and Roy Disney as the Disney Brothers Cartoon Studio, and established itself as a leader in the American animation industry before diversifying into live-action film production, television, and travel. The Walt Disney Company operates as five primary units and segments: The Walt Disney Studios or Studio Entertainment, which includes the company's film, recording label, and theatrical divisions; Parks and Resorts, featuring the company's theme
The case “Euro Disney: First 100 days” talks about the issues faced by the Walt Disney Company when expanding to international borders. The case begins with the history of Disneyland and then describes the reasons behind its success and expansion to various states across the country. It then describes the success of Tokyo Disneyland, first Disney theme park outside America and the factors affecting it.
To answer the main question of the case, we must think of the main problems that it faces. We need to find the solution for Bob Iger. What to do with Disney: to make some improvements in the existed company to compete better with Pixar, or to make a deal with another studio? Or should he work more with Pixar, or maybe just buy the whole company?
The Walt Disney Company has seen their share of success in taking their parks and resorts into global markets. “60 years ago, the first Disney theme park opened, in California and was the brainchild of Walt Disney himself, who was motivated by the lack of entertainment options available to him and his two young daughters.” (Forbes, 2016). Disneyland California penetrated the market rapidly, and its popularity led to the opening of Disney World in Florida, followed by global expansion in Tokyo, Paris, and Hong Kong. Their latest expansion came in June 2016, on a 963 acres’ site in Shanghai, China (Xu, 2012). After one year in operation, Shanghai Disneyland is outpacing their most optimistic projections, and the park’s
This made Disney the world’s second largest media firm behind Time Warner. As of mid-2007, Disney was a Dow 30 company, with annual revenues of nearly $34 billion in its previous fiscal year (“Disney Acquires Club Penguin,” 2007). Films for children contribute hundreds of millions of dollars to Disney annually (Robertson, 1998). One researcher suggested that Disney films inspire at least as much cultural authority
World cities are centres for cultural and entertainment facilities, these including sporting facilities, the opera house and entertainment centres. London is home to the renound Wimbledon tennis centre; its cultural identity contributes around 13 million a year to the cities economy. Hong Kong’s newly developed Disney Land employing over 7000 full time and part time members, with over 15 million visitors per year, this company contributions largely to the financial position of Hong
The Walt Disney Company (DIS) has a history marked with ups and downs. Taking numerous risks, expanding internationally, acquiring various businesses and diversifying its operations; the company has emerged stronger than ever. Ranking #53 on the Fortune 500, DIS has experienced continuous growth for the past 5 years, with bright prospects. Detailed analysis shows the market undervaluing the stock despite its healthy performance, indicating potential future gains.
* This represents 11.58% (=33,712,600 / 291,033,000) of 1984 operating income before corporate expenses, a percentage which is more common to grow, since Disney itself will probably not grow as rapidly as its JPY royalties
Tokyo Disneyland was opened to the public on April 15, 1983. This amusement park was owned and operated by an unrelated Japanese corporation. The Walt Disney Company received royalties, paid in Yen, on certain revenues generated by Tokyo Disneyland. This new overseas business venture was bringing some concern about the foreign exchange risk to Disney. The management team at the Disney has been considering hedging future Yen inflows from Disney Tokyo since 1985. Mr. Anderson, the director of finance at The Walt Disney Company, focused his attention on a possible 15 billion ten-year term loan with an interest rate of 7.5% paid semiannually. On the other hand, Goldman Sachs, who had been working with
As a conclusion, all of these factors are foreseeable by Disney. Lack of knowledge of the local culture and the American ethnocentric tendency make the foreseeable things covered with the mist. Global recession, wrong pre-assumption, and Unknowledgeable of local culture are controllable things that can be managed well. For example, during the global recession, Disney can introduce affordable packages which may attract people on visiting Euro Disney. The wrong pre-assumption that affect the construction design can be overcome by building a fast and temporary facilities while waiting for the permanent building is being built. Hiring local French advisor is one of the solutions to the lack of local culture knowledge. Yet, The intense competition that came from the Olympics, world fair, and landmark’s event are foreseeable but it’s hard to be controlled as such Olympics is just happening once in 4years and other events might happens once a year. People are more interested to visit those events rather than Euro Disney that can be visited anytime.
Disneyland in Hong Kong- Good or Bad? The aim of this essay is to discuss the advantages and disadvantages in having Disneyland coming into Hong Kong. Disneyland is a famous theme part, with outlets all around the world, including Japan, America and France. And now, Disney decided that the next theme part it is going to locate itself is Hong Kong- is how beneficial will it be to Hong Kong? The diagram on the left shows the proposed location of Disney land in Hong Kong. It will be situated at the west of Hong Kong island, in Penny?s Bay. Land reclamation will be used if extra land is needed for Disney to expand in the future.
[b] What resources and value-chain activities did Disney try to leverage through the opening of Mickey’s Kitchen?