Marriott Cost of Capital

Marriott Cost of Capital Case Study Company visibility The Marriott dope is a global real e world conglomerate with more than 3,400 properties in 70 countries and territories. It successfully manages trinity major business sector divisions: lodging, eaterys, and contract services. The overall somatogenic object of the community is to remain the leaders provider in the hospitality industry by having a competitive reinforcement over its competitors through innovation and state of the art guest service. To successfully achieve its business bearings and wrap up probative financial growth, the participations corporate enterprisingness foc implements on four components of its financial strategy: (1) manage or else than give 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 supposal of asset pricing (CAPM) and the cost of financial majuscule (WACC) to form how it can be used in the firm to cypher the required return for real investments based off of company specific data. Marriott uses the weighted number cost of capital (i.e.

omit rates) to determine its cost of capital on investments and to effectively run business operations. By calculating the weighted average out cost of capital and the cost of capital for the lodging and restaurant division, the company will be able to analyze the divers(prenominal) beauteousness and debt positions of e ach division and provide recommendations on ! how to push mint the companys WACC. Understanding the companys WACC is natural to the success of the business because it is a key component in determining the companys stock valuation and is as well a tool used to help the company with capital budgeting analysis as well as several antithetic applications. Marriott measured the opportunity cost of capital for investments of similar specify on the line using the weighted average cost...If you fate to get a full essay, order it on our website: BestEssayCheap.com

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