MARRIOTT CORPORATION

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MARRIOTT CORPORATION
The report is based on the case of Marriott Corporation. Your report should offer a discussion
of your analysis focusing on the questions provided below. The write-up should have the form of a
memo and should not exceed 2 pages. It should include a brief introduction to the problem and an
analytical section that discusses assumptions, procedures, techniques, and results. The report should
conclude with a short summary and/or recommendation for the course of action, if applicable. In
addition to the report, you should also submit your analysis in an electronic form (via e-mail, CD, or
flash drive). The due date for the report can be found on the course syllabus. You should work with
your own team, and not with other teams, on the report and analysis.
Question 1: How does Marriott Corp use its estimates of cost of capital, i.e. WACC? This question is
mostly qualitative in nature and should address the applications of cost of capital or “hurdle rate” to
various corporate decisions and policies in the context of Marriott Corp.
Question 2: It is often argued that managers could use a single, company-wide estimate of WACC.
What investments can be valued using such an estimate? What are pros and cons of this approach?
The question extends beyond Marriott Corp and calls for a more general discussion.
Question 3: Estimate the WACC for Marriott Corporation using the data provided in the case. Be
specific about inputs you use and assumptions you make. The question is quantitative in nature and
makes use of the tools and procedures discussed in class.
Question 4: Estimate cost of capital for each of the three divisions that are part of Marriott Corp. Feel
free to make any additional assumptions as needed but be sure to discuss them in your report.
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