Thomson One - Business School Edition - Walt Disney Prospectus Essay - 1

Thomson One - Business School Edition - Walt Disney Prospectus - Essay Example This is a type of debt whereby the investors are paid an interest rate for their money. This debt is different from others in that its interest rate resets after every four months. A company that offers this kind of debt has the right to sell bonds whose benchmark is different from those that are linked to the United States of America. Companies embrace this type of debt since they are able to hedge against risks related to interest rates and at the same time remain in corporates. Its main aim was to attract long term investors into buying the stocks. The company targeted both the existing as well as new investors. The fact that the debentures were offered as floating debt was one major factor that increased their marketability. The interest rates were to be offered in quarterly basis and this served to attract many people to buy the bonds. In addition, the bonds’ interests could be reviewed after every four months, a factor that could also increase its marketability. They wer e to be sold on the basis of shareholding. Those who already have shares at the company would fill an enrolment form to get the bonds at a minimum lower amount. Those who do not hold shares were also given a chance to buy the bonds but their minimum amount was set at a higher than the existing shareholders. 2) List the dollar amount of debt Disney proposed to sell to the public. Indicate whether this amount has increased or decreased from 2008 to 2010. Discuss some potential causes of this increase or decrease. At the time when Disney proposed to sell its debentures to the public, the amount to be sold was stated to be $1 billion (High Beam Business, 2013). The bonds were to be issued in the denominations of $2, 000. For the excess of $2, 000, there was to be issues of integral multiples of $1, 000. It is important to note that the proceeds that the company was to receive equalled $989, 760, 000 with the rest being commission to agents which was stated at the rate of 0.35% (High Bea m Business, 2013). Between the years 2008 and 2010, the amount in dollars increased. There are a number of reasons that could have led to this increase. One of them is the fact that the company needed more money as the expansion plan changed as the business environment changed. In addition, the company’s profitability may have reduced due to the global economic crisis that hit most countries. This reduced the amount of profit that the company could have re-invested and hence it had to borrow more. 3) Determine the percentage of the sales price Disney nets after discounts and commissions. Indicate whether this amount as decreased or increased from 2008 to 2010. Discuss some potential causes of this increase or decrease For every sale of shares or any kind of securities including bonds and debentures, the company usually does not sell them directly. The securities are normally sold through a broker or an agent who has to be paid a commission. In addition, the company may opt to sell its securities at a discount or at a premium. Discounts are expenses to be charged on revenue while premium is recorded as an income. In the case of Walt Disney, the bonds were not sold at a discount. However, there was a commission fee that was pain to the agents who were selling the bonds on behalf of the company. As it has been mentioned earlier, the discounts/ commissions

Obesity and health clubs Essay Example | Topics and Well Written Essays - 1500 words

Obesity and health clubs - Essay Example The reason for this could have been due to the rise in membership fees, which account for 75% to 85% of health club earnings. An alternative cause could be that health clubs are spending less than before, which accounts for a decrease in company expenditure. According to a report by Mintel (2011), the health and fitness club market has 5.33 million users, and as previously mentioned, this figure is predicted to increase with the upcoming Olympics. Market Trends The health club market has had some positive turns due to increasing awareness of obesity problems, and negative turns due to the economic crisis. Obesity In the UK, the high rate of obesity is a very serious problem that requires action to be taken. The following statistics by Keynote (2011) are obesity predictions for 2050: 60% of men, 50% of women, and 25% of children. This is a very large percentage of the population. In 2010 (confirm year), the government created a scheme in England called ‘Change4Life,’ whic h aimed to change the lives of the population of England by altering diet and exercise habits. This public encouragement of exercise could have influenced the rise we now see in health club use. Public and Private Health Clubs However, due to the current economic crisis, it is becoming difficult for health club members to pay the annual fees. In addition, as people are looking to decrease spending, health clubs are likely to be considered unnecessary during hard times, despite member loyalty. With an increase in government spending on health and welfare, public health clubs have seen improvements and increases in available resources. However, this does not benefit private health clubs like Virgin, which rely on membership numbers to generate profit. Distribution Health clubs provide a service in exchange for payment of membership fees. Some clubs also charge a joining fee. Once fees are paid, members can utilise the facilities as they please within the timeframe they have purchased. Health clubs often have an additional system where consumers can pay less for access to fewer facilities. At health clubs, members can also purchase items like water bottles or food, and often health-related products such as protein shakes and powder. Virgin Active is a chain of health clubs with 194 locations throughout South Africa, Italy, Spain, Portugal, Australia, and the United Kingdom. As of April 2011, Virgin Active had 69 health clubs in the UK, with a total of 265,000 members; this averages at 3,841 members per club. The fee to join a Virgin Active health club ranges from a monthly fee of ?50 to ?90. Virgin Active’s Competitors According to Mintel (2011), the leading fitness and health clubs in the industry in 2011 were: David Lloyd with 450,000 adult members, Virgin Active with 419,000 adult members, Fitness First with 400,000 adult members, DW Sports Fitness with 250,000 adult members, LA Fitness with 215,000 adult members, Bannatyne Fitness 180,000 adult members , and Nuffield with 150,000 adult members. After Virgin Active’s purchase of the Esporta business, the company moved into second place;