PRACTICES” IN ESTIMATING THE COST OF CAPITAL: AN UPDATE 15 “Best Practices” in Estimating the Cost of Capital: An Update W. Todd Brotherson‚ Kenneth M. Eades‚ Robert S. Harris‚ and Robert C. Higgins “Cost of capital is so critical to things we do‚ and CAPM has so many holes in it—and the books don’t tell you which numbers to use… so at the end of the day‚ you wonder a bit if you’ve got a solid number. Am I fooling myself with this Theories on cost of capital have been around for decades
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as he is reaching retirement‚ and TSE is a larger company with better marketing and global distribution channels. However‚ he is concerned with the fit of the two companies even though he thinks TSE is a better partnership than other alternatives. 2. What are the strengths and weaknesses of Yeats and its counterparty‚ TSE? Unlike TSE‚ which is more global-oriented with indirect distribution channels‚ Yeats has a stronger national and direct distribution channel. TSE has a larger mass market production
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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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Flows Relevant Cash Flows The Stand-Alone Principle Incremental Cash Flows Sunk Costs Opportunity Costs Side Effects Net Working Capital Financing Costs Other Issues Pro Forma Financial Statements and Project Cash Flows Getting Started: Pro Forma Financial Statements Project Cash Flows Projected Total Cash Flow and Value More about Project Cash Flow A Closer Look at Net Working Capital Depreciation Evaluating Equipment Options with Different Lives Project
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Rooms Division In a statistics conducted by the U.S. Lodging Industry in 1995‚ it has been shown that the majority of hotels revenues (60.2 %) are generated from Rooms Division Department under the form of room sales. This very department provides the services guests expect during their stay in the Hotel. Lastly‚ the Rooms Division Department is typically composed of five different departments: a) Front Office b) Reservation c) Housekeeping d) Uniformed Services e) Telephone FRONT OFFICE Is the
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Diversity matters to every one of us. The hospitality industry makes us unique in that we are able to appeal to each and every person in one way or another. In the lodging segment of the hospitality industry we come in contact with a wide variety of people every single day. Diversity is defined as "recognizing‚ appreciating‚ valuing‚ and utilizing the unique talents and contributions of all individuals” (Webster‚ 1999) regardless of age‚ career experience‚ color‚ communication style‚ culture
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Marriot use the Weighted Average Cost of Capital to estimate the cost of capital for the corporation as a whole and for each division‚ and the hurdle rate is updated annually.(WACC = (1-Tc) * (D/A) * R[D] + (E/A) * R[E]) Marriot’s Tax Bracket = 175.9/398.9 = 44% Division’s asset weight to the corporation: Lodging = 2777.4/4582.7 = 0.59 Contract = 1237.7/4582.7 = 0.28 Restaurant = 567.6/4582.7 = 0.13 Risk free rate is 30 years T-Bond = 8.95% (Lodging use long-term debt) Market Premium
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labor intensive and capital intensive‚ Soderberg should recommend that the Jacobs division move forward with production of Silicon-X using the labor-intensive option. The NPV and IRR methods make the same decisions if used for independent projects however‚ since these projects are mutually exclusive‚ the best NPV option should be used. In this case the NPV for the labor-intensive option is positive at twelve percent‚ sixteen percent and twenty percent while the capital option is only positive
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ROOMS DIVISION INFORMATION SHEET 1: I. HOTEL ORGANIZATION The following organizational criteria determine the staffing composition of a hotel: * A hotel’s size classification * A hotel’s location type * A hotel’s product type (service level and target market) A. FUNCTIONAL DEPARTMENTS Most full-service hotels have six main functional departments. Each of these departments will exist‚ in the form or another‚ regardless of location type or product type‚ They include:
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Marriott adheres by the laws in place to protect the employee‚ the employer‚ and the organization. As a result of legal decisions and administered laws‚ Marriott follows the employment guidelines established to produce better employee-employer relationships. The concept of equal employment opportunity has come a long way since the 1960s. Current and future business professionals continue the efforts in the workforce. An organization such as the Marriott‚ respect the Civil Rights Act which first
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