FINAN 6121 – Corporate Finance Cost of Capital – The Walt Disney Company Team Titans B (Doug Horne‚ Shaun Hoggan‚ James Thackeray‚ Jeff Burg) The purpose of this project is to determine the weighted-average cost of capital (WACC) for The Walt Disney Company. According to The Walt Disney Company’s Form 10-K filing for the fiscal year ended September 29‚ 2012‚ “The Walt Disney Company‚ together with its subsidiaries‚ is a diversified worldwide entertainment company with operations in five business
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pre-determined cost structure to account for and control expenses. WaMu primarily realizes transaction costs‚ fixed costs‚ and variable costs. Because WaMu doesn’t provide free services per-say‚ the sunk costs of the structure are fairly minimal. Transaction costs constitute the next smallest portion of WaMu’s cost structure. WaMu is free of infrastructure based transaction costs like those that smaller retailers who use point of sale services might incur. The primary transaction costs are the commissions
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COST STRUCTURE The Wal-Mart cost structure is known to be the lowest in the retail industry. Many economists do not agree with this structure because although consumers are happy with low prices Wal-Mart has forced its suppliers and competitors small and big to lower their prices in order for them to maintain the image and reputation of having the lowest prices around for quality products. Many cities and neighborhoods have banned Wal-Mart due to the fear of small businesses being run out of
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Cost structures Starbucks How Starbucks minimizes the impact of coffee prices I believe there are two explanations for the "irrelevance" of coffee prices. 1. Purchase contracts 2. Hedging Purchase contracts Starbucks buys most of its co ffee from suppliers through fixed-price commitments. This means that it won’t feel the effect of short-term fluctuations in coffee prices‚ as the price and quantity are fixed. I estimate that these commitments typically last around a year. Hedging
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The Walt Disney Company’s Organizational Structure Organizational structure The Walt Disney Company’s organizational structure looks most like a horizontal structure. Horizontal structure is based on departmentalization or subdividing the organization into subunits (Bateman & Snell‚ 2011). The Disney Company has five business segments: interactive media‚ studio entertainment‚ consumer products‚ parks and resorts‚ and media networks. These departments are grouped by product which is a great
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Oligopoly In a oligopoly market structure‚ there are a few interdependent firms that change their prices according to their competitors. Ex: If Coca Cola changes their price‚ Pepsi is also likely to. Characteristics: * Few interdependent firms * A few barriers to entry * Products are similar‚ but firms try to differentiate them * There is branding and advertising * Imperfect knowledge (where customers don’t know the best price or availability) Revenue Curves Total Revenue
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The Disney Corporation is a leading diversified international family entertainment and media enterprise with five business segments: media networks‚ parks and resorts‚ studio entertainment‚ consumer products and interactive media. (Disney Corporate‚ 2009). This company did not become one of the leading corporations in the world without hard work‚ an extreme dedication to the mission and core values of the organization‚ and the successful application of the four functions of management: planning‚
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BUS 100W 10/24/12 Walt Disney: Organizational Culture Disney as a company first started as an animated film industry in October 16th‚ 1932. They were originator of the infamous cartoon Mickey Mouse that put them on the market. From then on Walt Disney became one of the biggest animated film companies. Through the years Walt Disney developed a theme of “to bring happiness to all” through “magic” and Disney’s team of creative and innovative people would continue Walt Disney Company as it is today
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The Original Disney Company (pre-1984) Walt Disney set a vision for the company – to provide wholesome family entertainment. Everything that the company did was aligned to this vision and corporate philosophy. The key ingredient that fueled the success of Walt Disney Company was its ability to create new‚ unique cartoon characters that had universal appeal. Over the years‚ Disney did a great job in bringing these characters to life‚ and kept introducing new characters that further solidified
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1. What is the weighted average cost of capital for Marriot Corporation? Briefly outline the key assumptions that you made in computing the WACC. 2. What is the cost of capital for the lodging and restaurant divisions of Marriot Corporation? Briefly outline the key assumptions that you made in computing the cost of capital and outline any limitations that are presented by your analysis. 3. If Marriot uses a single company-wide cost of capital for evaluating investment opportunities in each of its
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