Marriott Corporation: The Cost of Capital Executive Summary J. Willard Marriott started Marriott Corporation in 1927 with a root beer stand‚ expanding it into a leading lodging and food service company with sales of over $6 billion by 1987. At the time‚ Marriott had three main lines of business‚ lodging‚ contract services and restaurants‚ with lodging generating about 51% of company’s profits. The four key elements of Marriott’s financial strategy were managing hotel assets rather than owning‚
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1. How does Marriott use its estimate of its cost of capital? Does this make sense? Marriott has defined a clear financial strategy containing four elements. To determine the cost of capital‚ which also acted as hurdle rate for investment decision‚ cost of capital estimates were generated from each of the three business divisions; lodging‚ contract services and restaurants. Each division estimates its cost of capital based on: Debt Capacity Cost of Debt Cost of Equity All of the above are
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PresidentsY/A | Political Philosophy | Achievements | Strengths | Weaknesses | Evaluation | Threats | Laws | GENERAL EMILIO FAMY AGUINALDOTerm: (1898- 1901) | | Aguinaldo is best remembered for the proclamation of Philippine Independence on June 12‚ 1898‚ in Kawit‚ Cavite. Aguinaldo formally established the first Philippine republic. He also designated diplomats who were assigned in the major world capitals to seek recognition of Philippine independence | | | | | | MANUEL LUIS QUEZONTerm:
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Question 6 What is the cost of capital for the lodging and restaurant divisions of Marriott? Answer: The cost of capital for lodging is 9.2% and the cost of capital for restaurants is 13.1% Calculation: WACC = (1-t) * rd * (D/V) + re* (E/V) Where: D= market value of DEBT re = aftertax cost of equity E = market value of EQUITY V = D+E rd = pretax cost of debt t = tax rate To calculate the formula above‚ we need to determine each component Tax rate (t) 56% --> calculated before LODGING
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Carlton‚ Inc.‚ a leading lodging company with over 3‚100 lodging properties in the United States and 66 other countries and territories (Marriott International‚ Inc. Corporate Headquarters‚ 2008). My key task is to discuss market segmentation‚ targeting and positioning strategies of the company with the following brands: Marriott Hotels & Resorts and Courtyard by Marriott in the same marketplace‚ Asia-Pacific. As the fast expansion in economy of Asia-Pacific‚ the hospitality industry has a bright perspective
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Marriott Case 1. What is the WACC for Marriott Corporation? Cost of Debt Tax Rate We determined this number by taking income taxes paid/EBITDA = 175.9/398.9 = 44.1% Return on debt There are two clear components of debt: fixed and floating. In order to get the fixed debt rate we took the interest rates on fixed-rate government securities and added the premium
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HBR Case #1 Marriott Corporation: The Cost of Capital Group 16—Tutorial Mon 11:30am Group members LIU Ying‚ Chloe | 1155019350 | LUO Yingying‚ Irika | 1155020931 | TIAN Tian‚ Sarah | 1155019114 | WU Jiajie‚ Jesse | 1155019061 | 17 September 2012 Executive Summary By 1987‚ Marriott Corporation had grown into a large multi-dimensional company with over $5 billion assets in lodging‚ contract services and restaurants. The company enjoyed fast growth in both sales and assets at around
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Sheet1 Marriott Cost of Capital Lodging Division Tax Rate 0.44 Equity Beta D/D+S Lodging Hilton Holiday La Quinta Ramada Average 0.76 1.35 0.89 1.36 1.09 14% 79% 69% 65% 0.5675 S/D+S 86% 21% 31% 35% 0.4325 D/S Unlevered Beta 0.16 3.76 2.23 1.86 2.00 0.65 0.28 0.28 0.48 0.42 Target D/D+S Target D/S Levered Beta 74% 2.85 1.62 Costs of Equity: Rf Lodging MRP 8.95% 7.43% Beta Requity 1.62 21.02% Costs of Debt: Rf Lodging 8.95% Spread Tax rate Rdebt(1-T) 1.10% 0.44 0.0563 WACCs: Lodging
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Matrix Algebra http://elearning.usm.my Md Harashid bin Haron‚ Ph.D. Accounting Section‚ School of Management‚ Universiti Sains Malaysia (USM)‚ 11800 Pulau Pinang‚ Malaysia Email: harashid@usm.my ; mdharashid@gmail.com Matrices? A rectangular array of numbers consisting m horizontal rows and n vertical columns. 5 3 4 2 2 1 6 4 2 A= 5 3 4 2 2 1 6 4 2 A has a size of 3 x 3; 3 x 3 matrix; 3 rows and 3 columns (row is specified
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Within The Matrix‚ Free will and fate work together to maintain the delicate balance between the Matrix and the real world‚ fate being what is instilled in the humans stuck inside the Matrix‚ and free will for those who get out. In the Matrix‚ the computer generated world in which humans "live"‚ it appears that fate is the driving force of the simulation. This is due to the fact that the computer system is prewritten‚ predesigned‚ and already programed for each individual. However‚ free will begins
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