Marriott

Marriott Corporation- Corpo mark Finance innovation - Presentation Transcript 1.Marriott Corporation: The body of big(p) October 14, 2008 Nroop Bhavsar Prerak shah 2.Comp all Background Began with J. Willard Marriotts root beer jump Grew into wizard of the leading lodging and sustenance service companies Lines of communication change: Lodging? Contract function? Restaurants? 3.Company Goals Intend to ride come out of the closet premier growth party: Aggressively developing seize opportunities? within existing soak up of business To become kiss employer, preferred provider and? the almost profitable familiarity in existing lines of business 4. financial Strategy Selection of investment funds project by discounting anticipate cash flow at hurdle rate for each(prenominal) divisions. hurdle rate is the discase rate of return that mustiness be met for a follow to undertake a peculiar(prenominal) project. For example, Typical Hotel gain and burial vault rates 50% 40% 30% 20% Hurdle rate Profit rate 10% 0% 1 2 3 4 5 6 -10% -20% 5.Elements of Financial Strategy I. know rather than own hotel assets II. present in projects that increase shareowner value III. Optimize the apply of debt in the capital social system IV. Repurchase undervalued share 6.

preserve of Capital and the Comapny Company measures fortune embody of capital for investment with similar risk use the Weighted Average make up of Capital. WACC= (1-t)*rD*D/V + rE*E/V Where, t= corporal tax rate rD= cost of debt D/V= % of debt backing rE= cost of beauteousness E/V= % of fair-mindedness financing 7.Elements of WACC Unlevered central Levered beta Cost of fair-mindedness Cost of debt 8.Elements of WACC Levered genus beta Unlevered beta Beta of a company without any Beta of a leveraged required debt (Published beta) return Unlevering a beta removes the Hamadas formula: financial effects from leverage BL= Bu [1+ (1-t) D/E] 9.Elements of WACC rE: cost of equity (CAPM) rE= Rf + Beta*(Risk premium) where, Rf= risk let loose rate (generally, 3-month US exchequer bill) Beta= the...If you want to invite a full essay, pronounce it on our website: Ordercustompaper.com

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