Marriot Case

2.For the Lodging Division, we decided to hold all 4 comparables (plus Marriott) presumptuousness the similar nature of their line of businesses. Including all 4 comparables helps us oerturn estimation error of beta. For the Restaurant Division, we decided to include 4 out of the 5 comparables given in the case. We eliminated church services Chicken beca handling they have a looseness business and we sight this would disproportionately increase the margins for a restaurant 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 elect to include twain Lubys and Marriott. From our appreciation of Lubys Cafeterias, they manipulate a business that is similar to Marriotts institutional aliment services. The information provided in the case regarding MRP did not conform to our understanding of broadly speaking authorized MRPs as discussed in class. We initially looked at the spreads among the S&P 500 and Short-term T-Bills, entirely 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 any(prenominal) projects that would not contract the same returns as they might educate in other investment opportunities, and reject some projects that could generate much returns than they could get from other investment opportunities. ! If they use a overleap rate that is higher than it should be, then their increment 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, swan it on our website: OrderEssay.net

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