ltc fin370 wk5 copyright 2013 edward f. t. charfauros
DESCRIPTION
Edward F. T. Charfauros, inspiring author, assists fellow students with their presentation for a successful grade. He also blogs upon his own inspiring blog, where you'll discover life changing stuff. Sign up for his blog by sending him an email~ Copyright 2013 Edward F. T. Charfauros. Reference, www.YourBlogorResume.net.TRANSCRIPT
![Page 1: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/1.jpg)
Presentation by Celine Israel, Edward Charfauros and Tawnya Tanudra
Baderman’s Island Resort
![Page 2: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/2.jpg)
Copyright 20092
Agenda
• Introduction• Option Approach Strengths • Effects Of Globalization On Financial Decisions
Edward
Celine
Tawnya
• Option Approach Weaknesses• Option Approach Opportunities• Option Approach Threats
• Contributing Factors To Exchange Rate Risks• Mitigating Exchange Rate Risk• Conclusion
![Page 3: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/3.jpg)
Copyright 20093
• A modern complex luxurious resort • Best known for its customer adjustments meeting
every customer want through BIR’s amenities and facilities.
• Consists of a convention center, a pro shop, a spa, two gift shops, three world-class hotels, and four restaurants.
• Boardman Management Group manages the resort as each business entity is operating independently.
• Currently growing its recreational tourist centre • Prioritizing its business surrounding total quality
management (TQM) • Which implements BIR’s strategic objective. • Emphasizes continual empowerment for
improvement • Is seeking software development to upgrade BIR’s
word processing software by integrating Microsoft’s excel, outlook, power point, and word.
Introduction
![Page 4: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/4.jpg)
Copyright 20094
• Sells its shares publicly to attain funding
for its expansion projects.
• Considers acquiring the Atlantis Resort
because of its assets to increase growth
and market share.
• Considers merging as a last option by
acquiring the assets and absorbing the
liabilities of another hotel resort by
merging with Marriott International
Incorporated
• Seizing advantage of Marriot’s
recognition for market power
increase.
Merger
Initial Public Offering
(IPO)
Option Approach Strengths
Acquisition
![Page 5: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/5.jpg)
5 Copyright 2009
Option Approach Weaknesses
• Sustainability • Influencing viability• Structural changes• Capacity building of the organization or value
addition to the operations• Firm growth
• A bust in activity • Company activity may witness a bust in form
of profitability • Shareholding value to firm owners• Corporate strategies through mergers and
acquisitions
![Page 6: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/6.jpg)
Copyright 20096
Option Approach Opportunities• Acquisitions
• Restructures companies • Leads to massive external growth • Takeover of assets and liabilities
• Mergers• Combine operations to expand shareholder growth and profitability
• Operation expansion• Enhance continuation in firm operations
• Start green field projects
![Page 7: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/7.jpg)
7 Copyright 2009
Option Approach Threats
• Mergers• Expensive to start green field projects• Equally complex
• Acquisition• Poses a challenge to firm ownership • Equally complex
![Page 8: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/8.jpg)
8 Copyright 2009
• Able to globally trade freely to increase capital gains from countries worldwide.
• Technology upgrades continue organizational development.
• Becoming more profitable through trades of services at a profit while minimizing communication and transportation costs.
• These affects assist BIR’s financial decisions lowering concern and lessening globalization costs.
Effects Of Globalization On Financial Decisions
![Page 9: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/9.jpg)
9 Copyright 2009
• The risk that tomorrow’s exchange rate will differ from today’s rate
• Adverse affects on value of a company’s operations and investments
• Potential gain/loss in foreign markets if currency value rises/drops
• Impact on shareholders, customers, creditors
Contributing Factors To Exchange Rate Risks
![Page 10: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/10.jpg)
10 Copyright 2009
Mitigating Exchange Rate Risk
• Avoid Foreign Exchange exposure
• Forward Contracts
• Currency Swap
• Foreign Exchange Options Hedges
![Page 11: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/11.jpg)
11 Copyright 2009
Summary
• Recommendation: Merge
• Increase market power
• Better financial leverage to expand internationally
• Requires less risk than IPO and Acquisition
• Hedge foreign exchange rate risks and exposure to maintain and develop firm’s value
![Page 12: Ltc fin370 wk5 Copyright 2013 Edward F. T. Charfauros](https://reader033.vdocuments.us/reader033/viewer/2022051817/54901821b4795969178b4d85/html5/thumbnails/12.jpg)
12 Copyright 2009
Questions?