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C. Case study Analysis (9 points)

Please read "Forecast Global Performance for a Mickey Mouse Organization", from Chapter 6 (Textbook). Then complete the following:

1. Describe the most interesting economic indicator for Disney stockholders. How can you forecast the average common stock price?

2. Compare the simple regression model B with the multiple regression model C.

3. Describe the independent variable (s) and the dependent variable included in model A and D.

Case Study

The Walt Disney Company is a diversified worldwide entertainment company with operations in four business segments: media networks, parks and resorts, studio entertainment, and consumer products. The media networks segment consists of the company's television (ABC, ESPN, and Discovery) and radio networks, cable/satellite and international broadcast operations, production and distribution of television programming, and Internet operations. The studio entertainment segment produces live- action and animated motion pictures, television animation programs, musical recordings, and live stage plays. The consumer products segment licenses the company's characters and other intellectual property to manufacturers, retailers, show promoters, and publishers.

Disney parks and resorts are at the cornerstone of a carefully integrated entertainment marketing strategy. Through the parks and resorts segment, Walt Disney owns and operates four destination resorts in the United States, Japan, and France. In the United States, kids flock to Disneyland, California, and Walt Disney World, Florida?an immense entertainment center that includes the Animal Kingdom, Magic Kingdom, Epcot Center, and Disney-MGM Studios. During recent years, the company has extended its amusement park business to foreign soil with Tokyo Disneyland, Hong Kong Disneyland, and Euro Disneyland, located just outside of Paris, France. Disney's foreign operations provide an interesting example of the company's shrewd combination of marketing and financial skills. To conserve scarce capital resources, Disney was able to entice foreign investors to put up 100 percent of the financing required for both the Tokyo and Paris facilities. In turn, Disney is responsible for the design and management of both operations, retains an important equity interest, and enjoys significant royalties on all gross revenues.

Disney is also a major force in the movie picture production business with Buena Vista, Touchstone, and Hollywood Pictures, in addition to the renowned Walt Disney Studios. The company is famous for recent hit movies such as Finding Nemo, The Lion King, Pirates of the Caribbean: The Curse of the Black Pearl, and The Sixth Sense, in addition to a film library including hundreds of movie classics like Fantasia, Snow White, and Mary Poppins, among others. Disney employs an aggressive and highly successful video marketing strategy for new films and re-releases from the company's extensive film library. The Disney Store, a chain of retail specialty shops, profits from the sale of movie tie-in merchandise, books, and recorded music. Also making a significant contribution to the bottom line are earnings from Disney's television operations which include ABC, The Disney Channel, the Discovery Channel, and sports juggernaut ESPN, the Entertainment and Sports Programming Network. The company's family entertainment marketing strategy is so broad in its reach that Disney characters such as Mickey Mouse, Donald Duck, and Goofy have become an integral part of the American culture. Given its ability to turn whimsy into outstanding operating performance, the Walt Disney Company is one firm that doesn't mind being called a "Mickey Mouse Org