Marriott Case

MEMO To:Dan Cohrs Vice President of go out Finance From:Finance Consultants replete aim of Management Boston University go steady:February 1, 2012 ------------------------------------------------- Re: Recommendations for Annual bank vault regularise Adjustments When expression at the hurdle judge our squad has deduced that utilise one hurdle rate for the entire Marriott potbelly is an death penalty to be used with caution and precisely executed when looking at investing in an comprehensive type of investment, such as a resort that consists of all in all segments: lodging, restaurants, and contr chips. However, when investing in projects betrothed to Marriotts individual cable television services of parentage we recommend use the circumstantial hurdle rates we work out as abide be seen in exhibit XX. utilize these hurdle rates will give Marriott a more entire moving photograph of the risk they face from dissimilar investment projects, enabling Marriott to act upon strategic investment decisions and non passing up any(prenominal) opportunities.

For the individual business segments that Marriott operates in, for caseful lodging, we further dissected the WACC calculations to decree a more holy hurdle rate for each(prenominal) line of business. We did this by looking at betas for companies within an labor (ex. lodging industry companies such as Ramada, La Quinta, etc.), and unlevering them so that they were regardless of their unique capital structures. We therefore averaged all of the unlevered betas and relevered it to Marriotts inhabit capital structure. Applying this restructured beta to our CAPM calculations provided for a much more accurate WACC calculation for the specific industries Marriott operates in. (ADD IN OTHER straggle OF THE important CALCULATIONS)If you want to get a full essay, stage it on our website: Ordercustompaper.com

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