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Spreadsheet Supplement for case 205121

Examines L'Oreal's acquisition of leading U.S. cosmetics brands, including Maybelline, Redken, and Kiehl's, and their subsequent renewal and globalization. Reviews the history of L'Oreal, now the world's largest cosmetics company, from its origins in France in 1907. The company entered the United States in 1953, and from 1990, expanded rapidly with the acquisition of U.S. brands, which were renewed and then taken international. Focuses on Kiehl's--since 1851, a quirky New York luxury brand--which L'Oreal acquired in 2000 and is now expanding globally. Shows how L'Oreal developed a portfolio of U.S. and European brands that are now sold globally. Explores the corporate strategy and marketing challenges facing consumer products firms as they globalize and how acquisitions can facilitate globalization.

Options are contracts that give the right, but not the obligation, to either buy or sell a specific underlying security for a specified price on or before a specific date. Explains the basis of options, covering fundamentals such as option terminology, the payoff schemes of options, parameters that influence their value, the put-call parity, and the upper and lower bounds of options prices. Presents problems for students to solve.

For every option, a fair price has to be established. But how do you actually price an option? Assuming a basic knowledge of options, this note covers two pricing methods: the binominal tree and the Black-Scholes/Merton formula.

Spreadsheet Supplement for case 205105

In March 2003, a client approached the Markets Advisory Group at ICICI Bank, India's second largest bank, about a hedging transaction. The hedge involved multiple interest rates and currencies. Shilpa Kumar, head of the Markets Advisory Group, has to put together a recommendation for the client. She can choose from a number of financial instruments, including swaps, options, and futures contracts on interest rates and currencies, in her recommendation.

Describes how JCDecaux, the second largest global outdoor advertising company, became the world leader in street furniture advertising in a fast consolidating business environment. Also explains why, in the late 1990s, JCDecaux diversified its activities into billboards and transport outdoor advertising in reaction to competitor attacks. Places students in the position of Jean-Francois Decaux and his brother Jean-Charles Decaux, the sons of the founder and JC Decaux's co-CEOs who, in late 2004, explore ways to continue the success of the 73% family-owned business.

Covers the first international nonperforming loan securitization done in Korea. The CEO of KAMCO is trying to dispose of a portfolio of nonperforming commercial loans that the organization acquired from a number of banks. A group of investment bankers have proposed securitizing the loans and selling them to institutional investors. Securitization of loans (or any other type of assets) is not common in Korea, so the CEO must think through several factors as he decides whether to accept this proposal, the most important of which is the recovery price.

Spreadsheet Supplement for case 205037

In response to a perceived undervaluation by the capital markets, Nestle is considering divesting a part of its ophthalmology subsidiary, Alcon, and must decide on a listing location. In the process, students are challenged to wrestle with the valuation of a conglomerate, the tradeoffs involved in listing in the United States versus Europe, and the incentive and tax consequences of that listing decision.

Focuses on a crisis in the board at Vivendi. Highlights the difficulties that arise when dramatic pressure from outside the boardroom affects boardroom dynamics. In this case, there are two events. The first is an unexpectedly large financial loss and a pending cash flow crisis that forces Vivendi's directors to deal with the issue of dismissing their CEO. Whatever they decide, their actions will be scrutinized by the press and investors and will likely be revisited in a legal environment. The second is the board diagnosing its role in the financial crisis by approving a series of costly acquisitions in recent years that led to the crisis.

Two members of Deutsche Bank's Fixed Income Research Group are discussing how to advise clients on bond vs. equity asset allocation. A critical aspect to this asset allocation decision is the equity risk premium. Discusses a unique way developed by the bank for understanding the implications of the risk premium.

Deutsche Bank's Fixed Income Research Group is looking for yield curve trades to pitch to clients as well as for their proprietary trading desk. The group has data on recent bond trades and a proprietary term structure model, which they can use to develop trading ideas.

Spreadsheet Supplement for case 205059

Spreadsheet Supplement for case 205040

Tells the story of the Czech transition from a centrally planned to a free market economy, describing the first economic reforms, the fixed-exchange rate regime, and the voucher privatization. Also explains why, in the middle of the 1990s, the Czech Republic liberalized its capital account and how this affected the Czech banking system, leading to a massive credit boom. Explores why Ceskoslovenska Obchodni Banka (CSOB), the country's fourth largest bank, decided not to participate in the credit boom and how CSOB determined and pursued its expansion strategy. Students assume the position of Pavel Kavanek, CSOB's CEO who, in June 2000, must decide whether CSOB should acquire IPB, another large Czech bank on the brink of bankruptcy.

Supplements the (A) case.

The American Institute for Foreign Studies (AIFS) organizes study abroad programs and cultural exchanges for American students. The firm's revenues are mainly in U.S. dollars, but most of its costs are in eurodollars and British pounds. The company's controllers review the hedging activities of AIFS. AIFS has a hedging policy, but the controllers want to review the percentage of exposure that is covered and the use of forward contracts and options. AIFS sets guaranteed prices for its exchanges and tours a year in advance, before its final sales figures are known. The controllers need to ensure that the company adequately hedges its foreign exchange exposure and achieves an appropriate balance between forward contracts and currency options. To obtain executable spreadsheets (courseware), please contact our customer service department at [email protected].