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Marriott Solutions WACC Lodging

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Marriott Solutions WACC Lodging
Sheet1

Marriott Cost of Capital Lodging Division

Tax Rate

0.44
Equity Beta
D/D+S

Lodging
Hilton
Holiday
La Quinta
Ramada
Average

0.76
1.35
0.89
1.36
1.09

14%
79%
69%
65%
0.5675

S/D+S
86%
21%
31%
35%
0.4325

D/S

Unlevered Beta
0.16
3.76
2.23
1.86
2.00

0.65
0.28
0.28
0.48
0.42

Target D/D+S
Target D/S Levered Beta
74%
2.85
1.62

Costs of Equity:
Rf
Lodging

MRP
8.95%

7.43%

Beta
Requity
1.62 21.02%

Costs of Debt:
Rf
Lodging

8.95%

Spread
Tax rate Rdebt(1-T)
1.10%
0.44 0.0563

WACCs:
Lodging

Target D/D+S Rdebt(1-T) S/D+S Requity WACC
74%
0.0563
26% 21.02%
9.63%

Page 1

Sales Weighted Levered Beta
1.56
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