1. Compute the simple average asset beta of the Marriott's Lodging division's comparable firms listed in Exhibit 3 (i.e. Hilton, Holiday, La Quinta, Ramada)? Round final answer to 2 decimals.

2. What is Marriott's Lodging 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)