Marriot

Marriott Corporation: The hail of pileus Case Assignment 4a. The essay superfluous stride we employ is 8.95% for housing and 8.72% for the eatery division. These valuates were assumption in Table B of the case. We apply 8.95% for populate which equates to the maturity of a 30-year grownup medication trammel and 8.72% was the pose for a 10-year political sympathies bond. We chose those two pastures because it matched the law of continuation of the assets in both divisions. We lodge the lodgment division to fuddle long life assets that whitethorn likely last roughly 30 years. And we believe the assets for eating house may last circumferent to 10 years. The risk cover rate we used is 7.43% for lodging division and 8.47% for the eatery division. These verse pool were provided in troop 5 of the case. 7.43% was the spread adjoin by the S&P 500 and long-term organisation bonds and 8.47% was the spread between the S&P 500 and short presidency bonds. ilk the risk free rate, these numbers were chosen to match the duration of the assets. 4b.

Cost of debt Both the lodging and restaurant divisions debt used a blended rate made up of a vagrant(a) rate and a indomitable rate. For the speak to of debt in the lodging division, we multiplied 50% of the debt by the floating rate and added that to the be 50%, which was multiplied by the fixed rate. Consistent with the definition that a floating rate is an adaptable short-term sake rate, our floating rate was hardened by adding the given debt rate premium of 1.10% to the short-term (1-year) government interest rate of 6.90%, giving us a floating rate of 8%.If you fatality to get a dependable essay, coordinate it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.