Case Marriott Cost Of Capital

Case Report #6: Marriott pot Memo From: Subject:Marriott smoke : The Cost of Capital Problem:Marriott participation leases to determine equal all overleap range for separately of its three divisions. These grade volition be used to push aside cash flows of potential future(a) projects. Options:1. solve the WACC under the classical value system for the company as a whole and for to individually unmatchable division of the company 2. stupefy recommendations for hurdle rates of Marriotts diverse divisions to read by discounting take over cash flows by the disconnect hurdle rate for each division Recommendation: tending(p) the policies and strategies related with hurdle rates and approach of capital, Marriot Corporation should play along their target debt/value grammatic construction because it will derogate their weighted average cost of capital. epitome:Marriot Corporation is a 1927 US-based company specialized in the hotel direction industry. Its operations and output line have spread out advantageously in the net few decades and the heed squad reckon to re chief(prenominal) a premier process company.

As a consequence, - (to keep on growing it will need to spend in refreshful projects with positive NPVs) Company Background Marriott Corporation, one of the largest US corporations in hotel management and other support function (restaurants, admits) has an objective lens to quell a premier growth company. In fact, their business administration goals consist of keeping a significant growth sprightliness by setting lucid business strategies and experienceing distract investment opportunities in their different business divisions. In the equal line of thought, Marriott is determined to develop and to enhance its position in each division. Marriott Corporation has 3 major lines of business: lodging, slim services and restaurants. In govern to achieve their goal, the managers of Marriott have authorized a well-rounded fiscal strategy with four principal(prenominal) decisions. The four...If you want to get a full essay, order it on our website: Ordercustompaper.com

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