Real World Focus

The proliferation of news and information on real world businesses making decisions every day suggests that we do not need to use hypothetical businesses to illustrate the principles of corporate finance. We will use four businesses through this book to make our points about corporate financial policy:

1. Disney Corporation: Disney Corporation is a publicly traded firm with wide holdings in entertainment and media. While most people around the world recognize the Mickey Mouse logo and have heard about or visited Disney World or seen some or all of the Disney animated classics, it is a much more diversified corporation than most people realize. Disney's holdings include real estate (in the form of time shares and rental properties in Florida and South Carolina), television (ABC and ESPN), publications, movie studios (Miramax, Touchstone and Disney) and retailing. Disney will help illustrate the decisions that large diversified corporations have to make as they are faced with the conventional corporate financial decisions - Where do we invest? How do we finance these investments? How much do we return to our stockholders?

2. Bookscape Books: is a privately owned independent book store in New York City, one of the few left after the invasion of the bookstore chains such as Barnes and Noble and Borders Books. We will take Bookscape Books through the corporate financial decision making process to illustrate some of the issues that come up when looking at small businesses with private owners.

3. Aracruz Cellulose: Aracruz Cellulose is a Brazilian firm that produces Eucalyptus pulp, and operates its own pulp-mills, electrochemical plants and port terminals. While it markets its products around the world for manufacturing high-grade paper, we will use it to illustrate some of the questions that have to be dealt with when analyzing a company in an environment where inflation is high and volatile, and where the economy itself is in transition.

4. Deutsche Bank: Deutsche Bank is the leading commercial bank in Germany and is also a leading player in investment banking with its acquisition of Morgan Grenfell, the U.K investment bank, and Banker's Trust in the United States. We will use Deutsche Bank to illustrate some of the issues the come up when a financial service firm has to make investment, financing and dividend decisions.

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