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Derivatives Essay Topics & Paper Examples

Mini Case Luxury Wars

Hermes decided to list 25% of Hermes SA on the French stock market in 1993. This was done to provide family members with a means to value their stake in the company as well as partially cash-out if they felt their family dividends were not enough. 2.LVMH was able to attain such a large ownership position without the knowledge of Hermes family and management through equity swaps. Equity swaps are derivative contracts whereby two parties enter into a contract to swap future cash flows at a preset date. The cash flows are referred to as “legs” of the swap. In most equity swaps, one leg is tied to a floating rate like LIBOR (the floating leg), and the other leg…