Marriot Case

2.For the Lodging Division, we decided to embarrass all 4 comparables (plus Marriott) given the similar nature of their line of businesses. Including all 4 comparables helps us all overturn estimation error of beta. For the Restaurant Division, we decided to include 4 out of the 5 comparables given in the case. We eliminated churchs Chicken beca handling they have a drama business and we sight this would disproportionately increase the margins for a eating house business. We also did not include Marriott because their restaurant division represents a relatively polished proportion of their business. Finally, for the Contract Services Division, we elected to include twain Lubys and Marriott. From our apprehension of Lubys Cafeterias, they perish a business that is similar to Marriotts institutional fodder services. The information provided in the case regarding MRP did not conform to our understanding of mostly authorized MRPs as discussed in class. We ab initio looked at the spreads among the S&P 500 and Short-term T-Bills, alone mat that the MRP spreads were too high.

As we learned in class, the MRP is generally accredited by academics as to be decreasing over meter and this is reflected in the decreasing spreads provided in the case. Therefore, we decided to go with a conservative estimate of 5%. 3.If Marriott used a ace cost of capital for evaluating investment opportunities, they would accept nearly projects that would not bear the same returns as they might pop in other investment opportunities, and reject some projects that could generate much returns than the y could get from other investment opportunit! ies. If they use a overleap rate that is higher than it should be, then their growth would be reduced. Conversely, if they use a hurdle rate that is lower than it should be, their growth would be accelerated.If you want to get a full essay, gild it on our website: BestEssayCheap.com

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