Marriott Corporation : Cost Of Cap

COST OF EQUITY Given

Re Rf
GM Marriott 4.27
GM Lodging 4.93
AM Restaurant 3.54

COST OF DEBT Rd
Marriott 10.25
Lodging 9.82
Contract 8.3
Restaurant 8.7

Tax 0.44

Answer 3: WACC
Marriott
Lodging
Restaurant
ration : Cost Of Capital
from sheet 2 Given
Equity Beta Rp
0.97 5.63
0.3443889879 4.97
0.1914063015 8.47

Government rate of borrowing Premium above govt rate

8.95 1.3
8.72 1.1
6.9 1.4
6.9 1.8

Note: In Exhibit 1 = Income tax/Income before taxes

7.33644
5.956165308
4.8532845494
Re = Rf + Beta(Rf-Rm)
9.7311
6.64161327
5.1612113734
 LODGING
hilton holiday crop
Levered Equity beta 0.88 1.46
Market Leverage 0.14 0.79
D/E 0.1627906977 3.7619047619
(asset) Unlivered Beta 0.8064791134 0.4699570815
Sales 0.77 1.66
Assigned Weight 0.23 0.50
Weighted UnLevered B 0.19 0.23
Avg weighted Unlevere 0.13

Re- Levered Beta

LB= Bu(1+(D/E)*(1-t)
Debt % in capital 0.74
D/E= debt% in
capital / 1- debt%in
capital 2.8461538462

Re-Lbeta 0.3443889879
la quinta Ramada
0.38 0.95
0.69 0.65
2.2258064516 1.8571428571
0.1691556577 0.4656862745
0.17 0.75 3.35
0.05 0.22
0.01 0.10
 Restaurant
Church Collins Frisch Luby
Levered Equity beta 0.75 0.6 0.13 0.64
Market Leverage 0.04 0.1 0.06 0.1
D/E 0.0416666667 0.1111111111 0.0638297872 0.1111111111
Unlivered Beta 0.7328990228 0.5648535565 0.1255135579 0.6025104603
Sales 0.39 0.57 0.14 0.23
Assigned Weight 0.0536451169 0.0784044017 0.0192572215 0.0316368638
Weighted UnLevered B0.0393164538 0.0442870051 0.0024170424 0.0190615414
Avg weighted Unlevere0.1361821085

Re- Levered Beta

LB= Bu(1+(D/E)*(1-t)
Debt % in capital 0.42
D/E= debt% in
capital / 1- debt%in
capital 0.724137931

Re-Lbeta 0.1914063
Mc D Wendy
1 1.08
0.23 0.21
0.298701 0.265823
0.856698 0.940062
4.89 1.05 7.27
0.672627 0.144429
0.576238 0.135772