divisions. Cost of Capital for Lodging Division can be expressed as CC = We*Ce + Wd*Cd. For the weights of debt and equity (We and Wd)‚ the 1988 target-schedule rates of debt-to-assets and debt-to-equity were used as the only measures available in the case. Cost of Equity (Ce) was calculated based on the CAPM formula. 30-year T-bond was used as a long-term risk-free security to get the risk-free rate‚ since Marriott used the cost of long-term debt for its lodging cost-of-capital calculations
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Corporation: The Cost of Capital Executive Summary J. Willard Marriott started Marriott Corporation in 1927 with a root beer stand‚ expanding it into a leading lodging and food service company with sales of over $6 billion by 1987. At the time‚ Marriott had three main lines of business‚ lodging‚ contract services and restaurants‚ with lodging generating about 51% of company’s profits. The four key elements of Marriott’s financial strategy were managing hotel assets rather than owning‚ investing in
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represents a different risk. Each division also represent different weighted average capital costs which should be used to asses the value of incoming projects. It would be inefficient to use one hurdle rate since it is easy to see that Marriott’s lodging is much more profitable than the Marriott restaurants and therefore less risky. If Marriott uses a single hurdle corporate over time it will build up miscalculations‚ negative net present
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HOSPITALITY MARKETERS INTERNATIONAL‚ INC. Sample Market Study Report Outline This outline will highlight the key areas researched in our typical Market Studies and can be used as an outline for the information to be presented in our reports. At times‚ our reports may deviate from this outline and will be customized to include more topic areas or eliminate some‚ depending upon their relevance to the report. In a Phase l Community Overview Market Study Report‚ these areas are thoroughly researched
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Division’s asset weight to the corporation: Lodging = 2777.4/4582.7 = 0.59 Contract = 1237.7/4582.7 = 0.28 Restaurant = 567.6/4582.7 = 0.13 Risk free rate is 30 years T-Bond = 8.95% (Lodging use long-term debt) Market Premium is the Spread between S&P 500 and long-term US bond = 7.43% Debt rate premium above government = 1.10% Lodging’s D/A = 0.74 & Lodging’s E/A = 0.26 We use Ramada Inns‚ Inc. as the comparable to find β for Marriot’s lodging division. (E/A = 0.35‚ βE = 1.36‚ and assuming
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its elegant and comfortable hotels and resorts. The company caters to a targeted customer base‚ ranging from the frequent corporate business traveler to the family enjoying their occasional weekend get-away. Marriott has continued its rise in the lodging‚ contract services‚ and restaurant industries. The company continuously strives to meet the needs and wants of its customers while strategically maneuvering the rigors of today’s competitive and ever-evolving market of glamorous destinations and convenient
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entities in groups currently lodging special purpose financial statements. After receiving a higher number of responses from interested parties than usual‚ the AASB delayed their decision on the fate of special purpose financial statements (now known as Stage two of the differential reporting project) until more empirical research had been conducted. Research results At the time of writing‚ a significant amount of research has been undertaken on the numbers of entities lodging special purpose financial
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The Doubletree by Hilton London - West End lodging is in a perfect world situated in London’s memorable Bloomsbury area‚ in the middle of Holborn and Russell Square underground stations. Doubletree by Hilton inn has conventional‚ memorable character‚ while as yet keeping up the majority of the cutting edge comforts of this day. The bar92 eatery gives visitors evening tea‚ night beverages‚ and full individually meals. The wellness focus is open for visitors who need to assuage stretch in the wake
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rates for the three divisions of Marriot Corporation (Lodging‚ Contracts‚ and Restaurants) which will have a significant impact on the firm’s financial and operating strategies. Marriott’s has been truthful to its operating strategy to remain a premier growth company‚ Marriott’s sales and earnings per share have doubled over the last four years. In 1987 Marriot’s sales rose 24%‚ the return on equity was 22% and profits were $223 million. Lodging consisted of 51% of Marriott’s profits‚ while contracts
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leading food service companies in the United States. As of 1987‚ Marriott recorded a profit of $233 million on sales of $6.5 billion and retained a high sales growth rate of 24%. Marriott runs on three major lines of business lodging‚ contract services‚ and restaurants. Lodging division which includes 361 hotels generated 41% of 1987 sales and 51% profits. Contract services division which provides food and services management generated 46% of 1987 sales and 33% of profits. Lastly‚ the restaurant division
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