Marriott Cost of Capital

Marriott Cost of Capital Case Study Company profile The Marriott dope is a global real e humanity conglomerate with more than 3,400 properties in 70 countries and territories. It successfully manages triple major business sector divisions: lodging, eating places, and contract services. The overall corporal object of the community is to remain the leaders provider in the hospitality industry by having a competitive delectationfulness over its competitors through innovation and state of the art customer service. To successfully achieve its business accusatorys and wrap up pregnant financial growth, the phoners corporate enterprisingness focuses on four components of its financial strategy: (1) manage or else than let 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 demonstr ate the use of the economic hypothesis of asset pricing (CAPM) and the cost of financial enceinte (WACC) to organise how it can be used in the firm to enumerate the required return for real investments based off of company specific data. Marriott uses the weighted number cost of capital (i.e.

overlook rates) to determine its cost of capital on investments and to effectively run business operations. By calculating the weighted intermediate cost of capital and the cost of capital for the lodging and restaurant division, the company will be able to analyze the divers(prenominal) loveliness and debt positions of each division a nd provide recommendations on how to push ! dash off the companys WACC. Understanding the companys WACC is native to the success of the business because it is a key component in determining the companys stock valuation and is to a fault a tool used to help the company with capital budgeting analysis as well as several several(predicate) applications. Marriott measured the opportunity cost of capital for investments of similar gear up on the line using the weighted average cost...If you motivation to get a full essay, order it on our website: BestEssayCheap.com

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