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CASE STUDY
Three main lines of business.
• Lodging
• Contract services
• Restaurants
Financial Strategy
Calculating the WACC
Calculation of WACC Mariott Lodging Contract Restaurant
WACC= (1-t)*rD(D/V)+rE*(E/V)
Re= Rf + β X ( Rf- Rm )
Note That: Rf-Rm is called as Risk Premium.As Lodging is long term then we use 7,43%.
8,47% for both restaurant and contracts because they are short term
**Note That: For Long-Term we used S&P 500 and Long-Term U.S Bond Returns In Exhibit 5.
**Note That: For Short-Term we used S&P 500 and Short-Term U.S Treasury Bill Returns In Exhibit 5.
Unlevered beta (Asset Beta) is the beta of a
company without the impact of debt. It is
also known as the volatility of returns for a
company, without taking into account its
financial leverage.
LEVERED
BETA
MARRIOTT LODGING CONTRACTS RESTAURANTS