Mariott Corp case

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Issue:

Social Issues

 

Written by:

Cheryl B

 

Date added:

September 11, 2015

 

Level:

University

 

Grade:

A

 

No of pages / words:

4 / 1008

 

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6352 times

 

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To use this WACC it must be assumed that the cost of capital of the company's individual business units and their share within Marriott's operations remain constant. The cost of debt, assuming that Marriott's credit rating remains at the same level, has a debt premium of 1.30% above the risk free rate...
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The risk free government interest rate with maturity of 30 years was at 8.95% in 1988. Since this concerns long-term debt we are using the 30 year risk free rate. Therefore the cost of debt equates to 10.25%. Marriott's corporate tax rate can be calculated as income tax over income before income tax...
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