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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Executive Summary The case‚ Marriott Corporation: The Cost of Capital (Abridged)‚ concentrates on making decisions based on capital asset pricing model (CAPM) and the weighted average cost of capital (WACC) to measure the opportunity cost for investments. Dan Cohrs‚ the Vice President of Finance of Marriott Corporation‚ had to deal with making recommendations for the hurdle rates at Marriott Corporation and its three divisions which are lodging‚ restaurant and contract services. In calculating
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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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products are sold everywhere convenience stores‚ grocery stores and kiosks. 2 - Cost of Capital A company’s capital is consists of mostly debt or equity. Equity and debt are external sources of financing and financing from external sources is not without cost. The cost of capital is the cost to raise capital through equity and debt. It can be defined as the weighted sum of the cots of equity and the cost of debt. It determines the rate of return that a firm would receive if it invested its
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Case 1- Marriott Corporation: The Cost of Capital Some preliminary questions: 1. What do you think about Marriott’s policy of repurchasing shares? Repurchase whenever stock price < warranted equity value Does this mean the market is inefficient? 2. Why does Marriott manage rather than own hotel assets? Finding limited partners on a hotel project is equivalent to selling private equity in the project Is there any reason to
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Background PepsiCo is currently involved in 7 Joint ventures in People’s Republic of China (PRC) and is in the proposal process of investing into an equity joint venture in the city of Changchun.This proposal would be one of the first two green field equity joint venture with PepsiCo having control over both the board and day-today managmenet. PepsiCo uses capital budgeting tools such as NPV and IRR to systematically evaluate their investment project. Using this evaluation method Mr Hawaux‚ vice
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PROJECT PEPSICO - 2009 CASE STUDY ANALYSIS LECTURER: Dr. Cherine Soliman Presented by: Hatem Hassan Zakaria Dina Zaher Eman Bahaa Doaa Essam Rashed Arab Academy for science‚ Technology and Maritime Transport (AAST) 1 Executive Summary PepsiCo‚ Inc. is one of the world’s top consumer product companies with many of the world’s most important trademarks. Its Pepsi-Cola Company division is the second largest soft drink business in the world‚ after Coca-Cola. To stay on the safe side‚ PepsiCo has introduced
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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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Pepsico Inc. analysis Seminar of business Strategy 18 novembre 2014 Mathieu Lemonnier Aurélien Marino Cédric Moulart 1 Marick Schippers Introduction Introduction History Market analysis Market definition Market size Market evolution Market trends Consumer trends PESTEL analysis PepsiCo Inc. Key figures Mix Net Revenue Market shares Competition Business model Supply chain Geographic analysis Responses to trends The customers Their strategy Challenges Main challenges 2 What does Pepsico
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home improvement retailer. They are now the second largest retailer in the United States‚ offering 40‚000 to 50‚000 different types of home improvement supplies‚ building materials‚ and lawn and garden products. They carry a wide assortment of low-cost products‚ and offer expert advice and exceptional customer service. As an innovator of the home improvement industry‚ Home Depot has expanded into Canada‚ Mexico‚ Argentina‚ Chile‚ and Puerto Rico. Currently there are 1‚459 stores including fifty
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