1. What is the weighted average cost of capital for Marriot Corporation? Briefly outline the key assumptions that you made in computing the WACC. 2. What is the cost of capital for the lodging and restaurant divisions of Marriot Corporation? Briefly outline the key assumptions that you made in computing the cost of capital and outline any limitations that are presented by your analysis. 3. If Marriot uses a single company-wide cost of capital for evaluating investment opportunities in each of its
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the repurchases of those shares were better uses of the company capital than acquisitions or owning real estate. In April 1988‚ the vice president of project finance‚ Dan Cohrs‚ was preparing his annual recommendations for the discount rates of Marriott’s three divisions. The investment projects would be selected by discounting them with appropriate cash flows
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a unique value for their customers and their customers are willing to pay for that added value. The Marriott hotel chain also has many opportunities for employment within their organization. Marriott’s web site has all job descriptions and job requirements available for potential employees. Marriott’s main business plan is to earn revenue and then customer satisfaction is next in line. Customer satisfaction means that customers are likely to return and or recommend Marriott to their friends
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1) Are the four components of Marriott’s financial strategy consistent with its growth objective? Manage rather than own hotel assets. Profiting from the sale of its hotel assets while still generating revenue from those assets‚ reduces risk increases ROA‚ profitability‚ and frees up cash for other positive NPV opportunities. This process is consistent with its strategy of growth. Invest in projects that increase shareholder value. As long as the company invests in projects with a positive
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John Willard Marriott September 17‚ 1900 – August 13‚ 1985 Born on September 17‚ 1900 in Marriott Settlement‚ Utah‚ as the eldest son of a poor farmer‚ J.W. Marriott was said to have learned to ride a horse before he could walk. Early in his upbringing‚ Marriott was held to a very strict and high standard of conduct from his father. His father also gave him responsibility at an early age making him a sheepherder on the farm to help his family. At the age of 19‚ he preached the gospel as a Mormon
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The Marriot International Hotels have had a long standing history of being recognized as one of the most prestigious hotels. The Marriot Hotel has specific expectations and responsibilities that are expected from their employees on a regular basis. Their reputation derives from the conduct of the Marriott associates who create this professional business environment on a day to day basis. The hotel industry can be a very unpredictable environment. Employees at the Marriott are confronted with situations
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applied the following formulae to calculate the WACC: Our assumptions are explained in the next section. The table below presents the approach for calculations at corporation level and division level according to each of the variables. Marriott’s capital structure comprises debt (fixed and floating) and equity. Marriott Corporation Business Lines 1 Beta of Debt (⬬d) Computed using correlation between S&P500 returns and HG Corp Bonds (recent history is implicitly more weighted)‚ s
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transform the look and feel of all Marriott brands to create a more comfortable hotel experience for all guests Thus the project team‚ composed of Project Management Professional (PMP®)-certified project managers managed by a program manager out of Marriott’s Lodging Program
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in Washington D.C. in 1927 with a small store appropriately named “The Hot Shoppe.” Shop sales grew and new ideas continued to rapidly expand existing business. Mexican food and soda were added as new products in the shop‚ thereafter increasing Marriott’s customer base. Later‚ Marriott again broadened its business line-up; this time with an airline catering business and cafeterias‚ which at the time radically transformed the way lodging companies fed their customers (Olivera Sijakovic‚ front desk
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use of debt in the capital structure repurchase undervalued shares Each of these aspects of the financial strategy support Marriott’s growth objective‚ except for the repurchasing of undervalued shares‚ which is not based on feeling of significant undervaluing of the stock by the market‚ but based on an internally generated intrinsic value of the company. Marriott’s cost of capital estimation process involves consideration of debt capacity‚ cost of debt and cost of equity. This data‚ plus
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