CASE HARVARD: MARRIOTT CORPORATION – THE COST OF CAPITAL (12)

1. Are consistent components of Marriott's financial strategy with its growth target?

2. Using estimates Marriott Capital Cost? Does it make sense this practice?

3. What is the average cost of capital weighted Marriott Corporation?

a. What risk-free rate and risk premium used in his calculations?

b. How did you measure the cost of debt Marriott?

c. Did you use the arithmetic average or geometric calculations on profitability? Why?

4. What kind of investments could be assessed using the weighted average cost of Marriott?

5. What is the business of Marriott?

Other questions:

·         What is the advantage of the investor?

·         What is the source of risk?

·         How much he is selling Marriott?

·         What does it mean to sell it as NPV (net present value)?

·         In case 2 ways to generate income are identified What is the 1st and 2nd form?

·         What are the advantages of changing the D/C? What about the WACC if I increase the ratio D/C?

·         What is the estimated risk-free rate? Is the rate terms, the historical average or today?

·         What is the premium market?

·         Should we use Arithmetic or geometric mean?

·         What time should I use?

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