...The park’s two major, local competitors are Disney and Universal. Walt Disney World is one of the world’s most popular travel destinations . Many tourists travel to Orlando only to never leave Walt Disney World property. Ever since Disneyland opened more than 60 years ago, company has prided itself as being an innovator that transforms fantasy into reality. All of the resort’s parks are designed to immerse rather than thrill. Disney attempts to hide their rides so that guests feel as though they are embarking on an experience rather than boarding a simple track ride. For example, a passing visitor would never guess that The Haunted Mansion ride actually takes place in a warehouse that is cleverly hidden by foliage and a facade. Disney’s theming is also driven by brand recognition. Mickey Mouse is one of...
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...ASSIGNMENT 8 SAMUEL ALVAREZ PROBLEM 5.1 As it is explained in the Exxon example, a firm might use a Divisional WACC, by identifying comparison firms(comps). These are firms that would have a similar risk and capital structure than the division for which we are trying to find a divisional WACC. The idea is to use an average WACC of these firms as an estimate WACC for our division. This would reduce the risk of the firm taking overinsting/underinvisting in its divisions. PROBLEM 5.2 Our project, since it has very low risk, could be an adding value project. This can be explained the following way: With the new project the firm would have a different WACC, since it’s Beta would change ( the very low beta of the project would influence the current firm’s beta, which would lead to a lower required rate of return). We must compare this new WACC with the expected return of the average of the firm’s current WACC and the project’S IRR. If this expected rate of return is higher than the newly calculated firm’s WACC, it would mean that the project is a value-increasing investment. PROBLEM 5.7 a. While the Domestic Beer and International Beer could be seen as a similar business segment, I think it would be necessary to have different cost of capital for each of this business segments for the following reasons: They may be selling almost the same product, but the circumstances around them are really different. Geographic, political, economical differences lead to risk differences...
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...Kingdom Park is located in Walt Disney World Resort, Orlando Florida and is part of The Walt Disney Company’s Parks and Resorts. The Walt Disney Company (Disney) does not report financial performance results specific to Magic Kingdom Park. However, according to Disney’s 2009 annual report, 2009 revenues for the Parks and Resorts affiliate were reported at $10.7 billion, which was down $800 million from 2008, but up slightly from 2007. Operating income on the $10.7 billion in revenue for 2009 was $1.4 billion. According to the Themed Entertainment Association (TEA), the Magic Kingdom drew an estimated 17.2 million visitors in 2009. And, Disney held nine of the top ten in attendance for theme parks worldwide. In terms of industry size, comparisons specific to WDW or Magic kingdom Park are difficult to grasp. Walt Disney World Florida, which encompasses 47 square miles, is the largest amusement park in the world. The International Association of Amusement parks and Attractions, for example, reports approximately 400 parks and attractions in the United States alone and in 2008, amusement parks in the United States entertained 300 million visitors who safely enjoyed more that 1.7 billion “rides.” In terms of industry size, The U.S. Census Bureau reported that estimated 2008 revenue for amusement and theme parks was $11.41 billion. Total estimated revenues for the same year for the arts, entertainment and recreation...
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