What is the cost of capital for the lodging and restaurant divisions of marriott

what is the cost of capital for the lodging and restaurant divisions of marriott Cost of capital for the lodging and restaurant divisions in april 1988, the vice president of project finance at the hilton corporation , christopher nassetta, was preparing recommendations for discount rates that should be used to evaluate each of the firm's three divisions.

We assumed that the lodging would have a useful life of 30 years and the restaurant would have a useful life of 10 years, so they definitely need to have different debt costs across the divisions because you have to compare them with the government rates that are similar in duration/maturity to the division c)how did you measure the beta for. Wacc for marriott= 1139% wacc for lodging division = 925% wacc for restaurant division = 1384% page 2 case 1 - marriott corporation: the cost of capital fin500 team 4: jesse galindo, sulabh gupta, maggie jones, wale olukanmi wacc for marriott's contract division = 2307% the main use of the hurdle rates is to assess investment decision in. 2) what is the cost of capital for the lodging and restaurant divisions of marriott a) what risk-free rate did you use in calculating the cost of equity for each division b) how did you measure the beta of each division. Using one single cost of capital across the different divisions: using a single corporate cost of capital for every single one of the different divisions would be negative for the company's profitability in the long run, because important components in the wacc formula such as debt and equity ratios varies between the different divisions. Marriott calculates the opportunity cost of capital by three inputs: debt capacity, debt cost and equity cost marriott not only calculates its overall wacc, but also calculates wacc for each of its three divisions, which are lodging, contract services, and restaurants.

What is the cost of capital for the lodging and restaurant divisions of marriott what risk-free rate and risk premium did you use in calculating the cost of equity for each division. Objective: 1) calculate the divisional and the company cost of capital and explain the calculation 2) evaluate marriott's use of company cost-of-capital rate for the individual divisions cost of capital for lodging division can be expressed as cc = wece + wdcd. Marriott-solution cargado por what is the cost of capital for the lodging, restaurant and contract service divisions of marriott. 3 what is the cost of capital for the lodging and restaurant divisions of from fbe 421 at university of southern california.

Marriott corp the cost of capital abridged - marriott corporation has three divisions lodging, contract services and restaurants with dissimilar operations. Marriott corporation: cost of capital case questions each question carries 5 points 1) discuss marriott's financial strategy - what are the opportunities, what are the. For instance lodging has a significant lower cost of capital (wacc) than the restaurant and even than the company as a whole using a single company-wide hurdle rate would create an uneven process in assessing investment opportunities across the divisions. Marriott corporation: the cost of capital (abridged) the purpose of this memo is to estimate the weighted average cost of capital (wacc) for marriott corporation and its three divisions, as well as explain the logic behind the calculations. Cost of capital - lodging and restaurant divisions we begin with an analysis of hurdle rates for the lodging and restaurant divisions, for which public comparable company figures are provided, to back into cost of capital for contract services in the next section, for which public comparables are not available.

- marriott's restaurant and contract service divisions can be thought of as having project lives of around ten years, its lodging division and marriott as a whole have longer economic lives. Lodging was considered to have longer useful lives and thus marriott would use long-term debt for their lodging cost of capital restaurant and contract services had. 6) what are the costs of capital for the lodging and restaurant divisions of marriott a) what risk-free rate and market risk premium do you use in calculating the cost of equity capital for each division. Because lodging assets, like hotels, had long useful lives, marriott used the cost of long-term debt for its lodging cost-of-capital calculations it used shorter-term debt as the cost of debt for its restaurant and contract services divisions because those assets had shorter useful lives. According to the cost-of-capital calculation methodology used by marriott corporation, lodging division was treated as long-term, while restaurant and contract services divisions were treated as short-term because those assets had shorter useful lives.

What is the cost of capital for the lodging and restaurant divisions of marriott how did you measure the cost of debt for each division and should they be different how did you measure beta for each division. What is the cost of capital for the lodging and restaurant divisions of marriott a what risk-free rate and risk premium did you use in calculating the cost of equity for each division. 6 what is the cost of capital for the lodging and restaurant divisions of marriott 8 7 what is the cost of capital for marriott's contract services division how can you. What are the costs of capital for the lodging and restaurant divisions of marriott what did you use for the components of each calculation and why what is the cost of capital for marriott's contract services division. Introduction and background we are conducting an analysis of marriott corporation for calculating the hurdle rates at each of the firm's three divisions--lodging division, restaurant division and contract service division marriott uses weighted average cost of capital (wacc) as the hurdle rate, and use it to discount.

Marriott corporation cost of capital case analysis - download as pdf file (pdf), text file (txt) or read online for the lodging and restaurant divisions, the. Marriott cost of capital evaluate marriott's use of company cost-of-capital rate for the individual divisions cost of capital for lodging division can be. Bus 270 (financial management), fall 2015 average cost of capital for marriott corporation capital for the lodging and restaurant divisions of marriott a.

If marriott used a single corporate cost of capital for evaluating investment opportunities in each of its lines of business, what would happen to the company over time 6 what is the correct cost of capital for the lodging and restaurant division of marriott. 5) what is the cost of capital for the lodging and restaurant divisions of marriott please refer excel us govtshort term (s&p 500 composite returns and shortterm uexhibit 5 lodging division -long term (long-term. What is the cost of capital for the lodging and restaurant divisions of marriott (discuss all the components and why as you did above) how did you measure the cost of debt for each division and should they be different.

what is the cost of capital for the lodging and restaurant divisions of marriott Cost of capital for the lodging and restaurant divisions in april 1988, the vice president of project finance at the hilton corporation , christopher nassetta, was preparing recommendations for discount rates that should be used to evaluate each of the firm's three divisions. what is the cost of capital for the lodging and restaurant divisions of marriott Cost of capital for the lodging and restaurant divisions in april 1988, the vice president of project finance at the hilton corporation , christopher nassetta, was preparing recommendations for discount rates that should be used to evaluate each of the firm's three divisions. what is the cost of capital for the lodging and restaurant divisions of marriott Cost of capital for the lodging and restaurant divisions in april 1988, the vice president of project finance at the hilton corporation , christopher nassetta, was preparing recommendations for discount rates that should be used to evaluate each of the firm's three divisions. what is the cost of capital for the lodging and restaurant divisions of marriott Cost of capital for the lodging and restaurant divisions in april 1988, the vice president of project finance at the hilton corporation , christopher nassetta, was preparing recommendations for discount rates that should be used to evaluate each of the firm's three divisions.
What is the cost of capital for the lodging and restaurant divisions of marriott
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