Question
1. Compute the simple average asset beta of the Marriott's restaurant division's comparable firms listed in Exhibit 3 (i.e. Church's Fried Chicken, Collins Foods International,
1. Compute the simple average asset beta of the Marriott's restaurant division's comparable firms listed in Exhibit 3 (i.e. Church's Fried Chicken, Collins Foods International, Frisch's Restaurants, Luby's Restaurants, McDonald's Wendy's International)? Round final answer to 2 decimals.
2. What is Marriott's Restaurant division's equity beta? Round final answer to two decimals.
| Exhibit 3 Information on Comparable Hotel and Restaurant Companies | |||||
| Company and Nature of Business | Arithmetic Average Returna | Geometric Average Returna | Equity Betab | Market Leveragec | 1987 Revenues ($ billions) |
| Marriott Corporation | 22.4% | 21.4% | 0.97 | 41% | $6.52 |
| (Owns, operates, manages hotels, restaurants, airline and institutional food services) | |||||
| Hilton Hotels Corporation | 13.3 | 12.9 | 0.88 | 14 | 0.77 |
| (Owns, manages, licenses hotels; operates casinos) | |||||
| Holiday Corporation | 28.8 | 26.9 | 1.46 | 79 | 1.66 |
| (Owns, manages, licenses hotels, restaurants; operates casinos) | |||||
| La Quinta Motor Inns | -6.4 | -8.6 | 0.38 | 69 | 0.17 |
| (Owns, operates, licenses motor inns) | |||||
| Ramada Inns | 11.7 | 2.8 | 0.95 | 65 | 0.75 |
| (Owns, operates hotels, restaurants) | |||||
| Churchs Fried Chicken | -3.2 | -7.3 | 0.75 | 4 | 0.39 |
| (Owns, franchises restaurants, gaming businesses) | |||||
| Collins Foods International | 20.3 | 17.7 | 0.60 | 10 | 0.57 |
| (Operates Kentucky Fried Chicken franchise, moderately priced restaurants) | |||||
| Frischs Restaurants | 56.9 | 49.7 | 0.13 | 6 | 0.14 |
| (Operates, franchises restaurants) | |||||
| Lubys Cafeterias | 15.1 | 12.8 | 0.64 | 1 | 0.23 |
| (Operates cafeterias) | |||||
| McDonalds | 22.5 | 21.3 | 1.00 | 23 | 4.89 |
| (Operates, franchises, services restaurants) | |||||
| Wendys International | 4.6 | -1.4 | 1.08 | 21 | 1.05 |
| (Operates, franchises, services restaurants) | |||||
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Sports Finance And Management Real Estate Media And The New Business Of Sport
Authors: Jason A. Winfree, Mark S. Rosentraub, Brian M Mills, Mackenzie Zondlak
2nd Edition
1138341819, 9781138341814
