Advanced Corporate Finance‚ March 2004 1. Weighted average cost of capital for Marriott Corp. The WACC is calculated using the formula: This uses the underlying assumption that the debt-equity ratio for the firm remains constant. In Marriott’s case the corporation’s target leverage ratio based on interest coverage target is set at 60% as taken from Table A. The WACC for the whole firm represents the average cost of capital of the firm’s underlying operating structure. To use this WACC
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Marriot Case Study AF 325 12/12/11 1. The divisional hurdle rates at Marriott have a significant impact on the firm’s financial and operating strategies. For every 1% increase in the hurdle rate there would be a 1% decrease in the net present value of projects inflows. It makes sense to institute these divisional hurdle rates in each of the company’s three divisions since it will assure that projects taken on will have a positive net present value. It is essential for Marriott to make
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__________________________ HBS Professor Thomas R. Piper and writer Jeffrey DeVolder prepared this case solely as a basis for cla ss discussion and not as an endorsement‚ a source of primary data‚ or an illustration of effective or ine ffective management. The authors thank John A. Schweig of W. W. Grainger‚ Inc. (HBS MBA 1983)‚ and Mary A. Noonan of Arrow Electronics (HBS MBA 1990)‚ for their valuable contributions to the development of this case. This case‚ though based on real events
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Case 4 Maverick Lodging Objective The Maverick Lodging case concerns the initial results of installing a new‚ comprehensive performance review system. As a consultant to Maverick Lodging and the Marriott Corporation‚ your task is to evaluate the efficacy of the new performance evaluation system. Your direct point of contact is Ms. Cindy Baum who was responsible for managing the rollout of the new performance evaluation system. Assignment Value 10 % of your grade Approach • Point of View:
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Financial Management 2013 Case 1: Laurinburg Precision Engineering HBS 9-193-098 1. The face value of each bond is $1000‚ to be paid in 5 years time. The effective rate of the bonds is 10% p/a‚ as dictated by the investor’s willingness to pay. The face value needs to be discounted to its present value‚ according to this effective rate (5% semi-annually for 10 6 month periods). The market value (present value) of each $1000 bond is $613.91. 2. Period | Date | Principal Due | Next Period Interest
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DUCATI CASE 1) How would you characterize Ducati’s strategy in terms of the types of generic strategies described in the first reading above? Marketing made by * specialized magazines‚ perfect to educate buyers about the characteristics of the bikes * non specialized magazines * racing events Technology and R&D: Ducati was innovative thanks to its desmodromic valve system and L-twin engine. It used racing competition to develop technical solution and test materials
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Case 2: Health Development Corporation HBS 9-200-049 1. Did the purchase of the Lexington Club real estate increase the value of Heatlh Development Corporation (HDC)? Calculate the NPV of the purchase. • Use pre-tax cashflows. • Assume the revenues of the Lexington Club grow by 5% per year. • Assume that the appropriate discount rate for real estate cashflows was 10%. • Assume a 20 year life of the facility. (Hint: In calculating the NPV of the decision to buy the real estate‚ you only
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"My children never realised their father was a hero." It took Tata by surprise‚ as he expected to encounter anger and sorrow. The above anecdote is narrated by Rohit Deshpande‚ professor at Harvard Business School (HBS)‚ who was interviewing Tata for a five-part video case study on crisis management at the Taj during 26/11. Deshpande started to teach the course at Harvard from October 2010. His students‚ especially non-Indians‚ were transfixed by the topic and were incredulous why employees
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Marketing Management‚ 4th edition (ISBN #: 978-0-13-602660-0 or 0-13-602660-5). Required Harvard Business School (HBS) Cases: • The following cases can be purchased at the Campus Bookstore or the Harvard Business School Online Publishing (http://harvardbusinessonline.hbsp.harvard.edu/hbsp/case_studies.jsp). o Mattel and the Toy Recall (A) (#9B08M010‚ Ivey School Case) o Heineken N.V.: Global Branding and Advertising (#9-596-015) o Strategic Inflection: TiVo in 2005 (#9-706-421)
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Session 2 Case: Laura Ashley Holdings plc: That Battle for Survival Study Questions: 1. Assess Laura Ashley’s recent performance. How serious is the company’s present predicament? 2. Identify reasons for poor and deteriorating financial performance. 3. What strategy recommendations would you offer to Mr. Cheong that would best serve the interests of Laura Ashley’s shareholders? Session 3 Case: Global Wine War 2009: New World versus Old Study
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