Case | HBS Case Collection | January 1987 (Revised September 1991)

Walt Disney Co.'s Yen Financing

by W. Carl Kester and William B. Allen

Abstract

Walt Disney is considering hedging future yen inflows from Disney Tokyo. It is evaluating techniques using FX Forwards, swaps, and Yen term borrowings. Goldman Sachs presents a rather unusual but potentially attractive solution: Disney could issue ECU Eurobonds and swap into a Yen liability. The case explains how this alternative would work and suggests to the students ways to evaluate the hedging choices.

Keywords: Borrowing and Debt; Currency; Bonds; Valuation; Tokyo;

Citation:

Kester, W. Carl, and William B. Allen. "Walt Disney Co.'s Yen Financing." Harvard Business School Case 287-058, January 1987. (Revised September 1991.)