Marriott Cost of Capital

Marriott Cost of Capital Case Study Company write The Marriott dope is a global real e land conglomerate with more than 3,400 properties in 70 countries and territories. It successfully manages trinity major business sector divisions: lodging, eating houses, and contract services. The overall tangible object of the community is to remain the leaders provider in the hospitality industry by having a competitive improvement over its competitors through innovation and state of the art node service. To successfully achieve its business headings and wrap up authoritative financial growth, the companions corporate enterprisingness foc enjoyments on four components of its financial strategy: (1) manage or else than admit assets, (2) invest in projects that increase shareholder value, (3) perfect the use of debt in the slap-up structure, and (4) repurchase undervalued shares. Cost of Capital The objective of this case study is to demonstrate the use of the economic surmisal of asset pricing (CAPM) and the cost of financial hood (WACC) to chuck how it can be used in the firm to guess the required return for real investments based off of company specific data. Marriott uses the weighted number cost of capital (i.e.

leap rates) to determine its cost of capital on investments and to in effect run business operations. By calculating the weighted bonnie cost of capital and the cost of capital for the lodging and restaurant division, the company will be able to analyze the divers(prenominal) candour and debt positions of each division and provide recomm endations on how to push sight the company! s WACC. Understanding the companys WACC is indwelling to the success of the business because it is a key component in determining the companys stock valuation and is also a tool used to help the company with capital budgeting analysis as well as several different applications. Marriott measured the opportunity cost of capital for investments of similar station on the line using the weighted average cost...If you fate to get a full essay, order it on our website: OrderCustomPaper.com

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