walt disney duration analysis student

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Copyright

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Walt Disney Company's Slepping Beauty Bonds-Duration Analysis-courseware

Harvard Business School Case 294-038

Courseware 9-208-725

This courseware was prepared by Professor Carliss Y. Baldwin solely for students as the basis for class discussion.

Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective

management. Copyright 2008 President and Fellows of Harvard College. No part of this product may be

reproduced, stored in a retrieval system, used in a spreadsheet or transmitted in any form or by any means

electronic, mechanical, photocopying, recording or otherwisewithout the permission of Harvard Business School.


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Sleeping Beauty Basic Spreadsheet

Calendar Relative Cash Flow Present

Year Year per $100 Value E

1993 0 100.001994 1 7.55

1995 2 7.55

1996 3 7.55

1997 4 7.55

1998 5 7.55

1999 6 7.55

2000 7 7.55

2001 8 7.55

2002 9 7.55

2003 10 7.55

2004 11 7.55

2005 12 7.552006 13 7.55

2007 14 7.55

2008 15 7.55

2009 16 7.55

2010 17 7.55

2011 18 7.55

2012 19 7.55

2013 20 7.55

2014 21 7.55

2015 22 7.55

2016 23 7.55

2017 24 7.55

2018 25 7.55

2019 26 7.55

2020 27 7.55

2021 28 7.55

2022 29 7.55

2023 30 7.55


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Sleeping Beauty Present Value as a Function o the !nt

Calendar Relative Cash Flow !nterest Present

Year Year per $100 Rates Values

1993 0 2% $339.201994 1 7.55 3% $243.78

1995 2 7.55 4% $186.99

1996 3 7.55 5% $150.61

1997 4 7.55 6% $125.76

1998 5 7.55 7% $107.85

1999 6 7.55 8% $94.38

2000 7 7.55 9% $83.89

2001 8 7.55 10% $75.50

2002 9 7.55 11% $68.64

2003 10 7.55 12% $62.92

2004 11 7.55 13% $58.08

2005 12 7.55 14% $53.932006 13 7.55 15% $50.33

2007 14 7.55 16% $47.19

2008 15 7.55 17% $44.41

2009 16 7.55 18% $41.94

2010 17 7.55 19% $39.74

2011 18 7.55 20% $37.75

2012 19 7.55 100% $7.55

2013 20 7.55 500% $1.51

2014 21 7.55 1000% $0.76

2015 22 7.55

2016 23 7.55

2017 24 7.55

2018 25 7.55

2019 26 7.55

2020 27 7.55


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rest Rate


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Sleeping Beauty Bonds o "i#erent aturity

Cash Flow per $100

Calendar Relative Sleeping %apping !nterest

Year Year Beauties Beauties Rates

1993 0 2%

1994 1 7.55 7.55 3%

1995 2 7.55 7.55 4%

1996 3 7.55 7.55 5%

1997 4 7.55 7.55 6%

1998 5 7.55 7.55 7%

1999 6 7.55 7.55 &'(()

2000 7 7.55 7.55 8%

2001 8 7.55 7.55 9%

2002 9 7.55 7.55 10%

2003 10 7.55 107.55 11%

2004 11 7.55 12%2005 12 7.55 13%

2006 13 7.55 14%

2007 14 7.55 15%

2008 15 7.55 16%

2009 16 7.55 17%

2010 17 7.55 18%

2011 18 7.55 19%

2012 19 7.55 20%

2013 20 7.55

2014 21 7.55

2015 22 7.55

2016 23 7.552017 24 7.55

2018 25 7.55

2019 26 7.55

2020 27 7.55

2021 28 7.55

2022 29 7.55

2023 30 7.55

2024 31 7.55

2025 32 7.55

2026 33 7.55

2027 34 7.55

2028 35 7.552029 36 7.55

2030 37 7.55

2031 38 7.55

2032 39 7.55


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Present Value

Sleeping %apping

Beauties Beauties

$339.20 $149.85

$243.78 $138.81

$186.99 $128.79

$150.61 $119.69

$125.76 $111.41

$107.85 $103.86

$100'00 $100'00

$94.38 $96.98

$83.89 $90.69

$75.50 $84.95

$68.64 $79.68

$62.92 $74.86$58.08 $70.43

$53.93 $66.36

$50.33 $62.61

$47.19 $59.16

$44.41 $55.98

$41.94 $53.04

$39.74 $50.32

$37.75 $47.80


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2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% 18% 19% 20%

$0.00

$50.00

$100.00

$150.00

$200.00

Present Value o a 100*year and a 10*yearBond as a Function o the !nterest Rate

!nterest Rate

PresentVa

lue

100*year +onds

10*year +onds


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Sleeping Beauty Calculation o "uration

Calendar Relative

Year Year Sleeping Beauties 10*Year Bond ,0*Year Bond

Interest 7.55% 7.55% 7.55%ate

"uration

-in Years. 1/'/ &',& 1'/

1993 0

1994 1 7.02 7.02 7.02

1995 2 6.53 6.53 6.53

1996 3 6.07 6.07 6.07

1997 4 5.64 5.64 5.64

1998 5 5.25 5.25 5.25

1999 6 4.88 4.88 4.88

2000 7 4.54 4.54 4.542001 8 4.22 4.22 4.22

2002 9 3.92 3.92 3.92

2003 10 3.65 51.94 519.41 3.65

2004 11 3.39 3.39

2005 12 3.15 3.15

2006 13 2.93 2.93

2007 14 2.73 2.73

2008 15 2.53 2.53

2009 16 2.36 2.36

2010 17 2.19 2.19

2011 18 2.04 2.04

2012 19 1.89 1.89

2013 20 1.76 1.76

2014 21 1.64 1.64

2015 22 1.52 1.52

2016 23 1.42 1.42

2017 24 1.32 1.32

2018 25 1.22 1.22

2019 26 1.14 1.14

2020 27 1.06 1.06

2021 28 0.98 0.98

2022 29 0.91 0.91

2023 30 0.85 12.11

2024 31 0.79

2025 32 0.74

2026 33 0.68

2027 34 0.64

2028 35 0.59

2029 36 0.55

2030 37 0.51

2031 38 0.48

2032 39 0.44


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2033 40 0.41

2034 41 0.38

2035 42 0.36

2036 43 0.33

2037 44 0.31

2038 45 0.29

2039 46 0.272040 47 0.25

2041 48 0.23

2042 49 0.21

2043 50 0.20

2044 51 0.18

2045 52 0.17

2046 53 0.16

2047 54 0.15

2048 55 0.14

2049 56 0.13

2050 57 0.12

2051 58 0.112052 59 0.10

2053 60 0.10

2054 61 0.09

2055 62 0.08

2056 63 0.08

2057 64 0.07

2058 65 0.07

2059 66 0.06

2060 67 0.06

2061 68 0.05

2062 69 0.05

2063 70 0.052064 71 0.04

2065 72 0.04

2066 73 0.04

2067 74 0.03

2068 75 0.03

2069 76 0.03

2070 77 0.03

2071 78 0.03

2072 79 0.02

2073 80 0.02

2074 81 0.02

2075 82 0.022076 83 0.02

2077 84 0.02

2078 85 0.02

2079 86 0.01

2080 87 0.01

2081 88 0.01

2082 89 0.01


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2083 90 0.01

2084 91 0.01

2085 92 0.01

2086 93 0.01

2087 94 0.01

2088 95 0.01

2089 96 0.012090 97 0.01

2091 98 0.01

2092 99 0.01

2093 100 0.07


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,0*Year 2ero

7.55%

,0

0

0

0

0

0

0

00

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

100


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Sleeping Beauty Sensitivity 3p

Calendar Relative Sleeping 10*Year ,0*Year ,0*Year

Year Year Beauty Bond Bond 2ero

Interest 8.55% 8.55% 8.55% 8.55%ate

Value 44',1 5,'/( 45',0 &('&

) Ch' !n Value *11'5) *'(() *10'&0) */'/)

1993 0

1994 1 6.96 6.96 6.96 0

1995 2 6.41 6.41 6.41 0

1996 3 5.90 5.90 5.90 0

1997 4 5.44 5.44 5.44 0

1998 5 5.01 5.01 5.01 0

1999 6 4.61 4.61 4.61 02000 7 4.25 4.25 4.25 0

2001 8 3.92 3.92 3.92 0

2002 9 3.61 3.61 3.61 0

2003 10 3.32 47.35 3.32 0

2004 11 3.06 3.06 0

2005 12 2.82 2.82 0

2006 13 2.60 2.60 0

2007 14 2.39 2.39 0

2008 15 2.21 2.21 0

2009 16 2.03 2.03 0

2010 17 1.87 1.87 0

2011 18 1.72 1.72 0

2012 19 1.59 1.59 0

2013 20 1.46 1.46 0

2014 21 1.35 1.35 0

2015 22 1.24 1.24 0

2016 23 1.14 1.14 0

2017 24 1.05 1.05 0

2018 25 0.97 0.97 0

2019 26 0.89 0.89 0

2020 27 0.82 0.82 0

2021 28 0.76 0.76 0

2022 29 0.70 0.70 0

2023 30 0.64 9.18 75.7561

2024 31 0.59

2025 32 0.55

2026 33 0.50

2027 34 0.46

2028 35 0.43

2029 36 0.39

2030 37 0.36

2031 38 0.33


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2032 39 0.31

2033 40 0.28

2034 41 0.26

2035 42 0.24

2036 43 0.22

2037 44 0.20

2038 45 0.192039 46 0.17

2040 47 0.16

2041 48 0.15

2042 49 0.14

2043 50 0.12

2044 51 0.12

2045 52 0.11

2046 53 0.10

2047 54 0.09

2048 55 0.08

2049 56 0.08

2050 57 0.072051 58 0.06

2052 59 0.06

2053 60 0.05

2054 61 0.05

2055 62 0.05

2056 63 0.04

2057 64 0.04

2058 65 0.04

2059 66 0.03

2060 67 0.03

2061 68 0.03

2062 69 0.032063 70 0.02

2064 71 0.02

2065 72 0.02

2066 73 0.02

2067 74 0.02

2068 75 0.02

2069 76 0.01

2070 77 0.01

2071 78 0.01

2072 79 0.01

2073 80 0.01

2074 81 0.012075 82 0.01

2076 83 0.01

2077 84 0.01

2078 85 0.01

2079 86 0.01

2080 87 0.01

2081 88 0.01


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2082 89 0.01

2083 90 0.00

2084 91 0.00

2085 92 0.00

2086 93 0.00

2087 94 0.00

2088 95 0.002089 96 0.00

2090 97 0.00

2091 98 0.00

2092 99 0.00

2093 100 0.03


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Sleeping Beauty Sensitivity "own

Calendar Relative Sleeping 10*Year ,0*Year ,0*Year

Year Year Beauty Bond Bond 2ero

Interest 6.55% 6.55% 6.55% 6.55%ate

Value 11('/ 10&'1& 11'55 1,',(

) Ch' !n Value

1993 0

1994 1 7.09 7.09 7.09 0

1995 2 6.65 6.65 6.65 0

1996 3 6.24 6.24 6.24 0

1997 4 5.86 5.86 5.86 0

1998 5 5.50 5.50 5.50 0

1999 6 5.16 5.16 5.16 02000 7 4.84 4.84 4.84 0

2001 8 4.54 4.54 4.54 0

2002 9 4.27 4.27 4.27 0

2003 10 4.00 57.03 4.00 0

2004 11 3.76 3.76 0

2005 12 3.53 3.53 0

2006 13 3.31 3.31 0

2007 14 3.11 3.11 0

2008 15 2.92 2.92 0

2009 16 2.74 2.74 0

2010 17 2.57 2.57 0

2011 18 2.41 2.41 0

2012 19 2.26 2.26 0

2013 20 2.12 2.12 0

2014 21 1.99 1.99 0

2015 22 1.87 1.87 0

2016 23 1.75 1.75 0

2017 24 1.65 1.65 0

2018 25 1.55 1.55 0

2019 26 1.45 1.45 0

2020 27 1.36 1.36 0

2021 28 1.28 1.28 0

2022 29 1.20 1.20 0

2023 30 1.13 16.03 132.3454

2024 31 1.06

2025 32 0.99

2026 33 0.93

2027 34 0.87

2028 35 0.82

2029 36 0.77

2030 37 0.72

2031 38 0.68


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2032 39 0.64

2033 40 0.60

2034 41 0.56

2035 42 0.53

2036 43 0.49

2037 44 0.46

2038 45 0.432039 46 0.41

2040 47 0.38

2041 48 0.36

2042 49 0.34

2043 50 0.32

2044 51 0.30

2045 52 0.28

2046 53 0.26

2047 54 0.25

2048 55 0.23

2049 56 0.22

2050 57 0.202051 58 0.19

2052 59 0.18

2053 60 0.17

2054 61 0.16

2055 62 0.15

2056 63 0.14

2057 64 0.13

2058 65 0.12

2059 66 0.11

2060 67 0.11

2061 68 0.10

2062 69 0.092063 70 0.09

2064 71 0.08

2065 72 0.08

2066 73 0.07

2067 74 0.07

2068 75 0.06

2069 76 0.06

2070 77 0.06

2071 78 0.05

2072 79 0.05

2073 80 0.05

2074 81 0.042075 82 0.04

2076 83 0.04

2077 84 0.04

2078 85 0.03

2079 86 0.03

2080 87 0.03

2081 88 0.03


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2082 89 0.03

2083 90 0.03

2084 91 0.02

2085 92 0.02

2086 93 0.02

2087 94 0.02

2088 95 0.022089 96 0.02

2090 97 0.02

2091 98 0.02

2092 99 0.01

2093 100 0.19


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Sleeping Beauty 6he Relation +etween "uration and !

Sleeping 10*Year ,0*Year ,0*Year

Beauty Bond Bond 2ero

) Ch i Rate "own 1) 0'0) 0'0) 0'0) 0'0)

"uration 1/'/ &',& 1'/ ,0'00

) Ch' ! Rate 3p 1) *11'&) *') *10'&) */')


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terest Rate Sensitivity

walt disney duration analysis student

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