Question
1.What is Marriott's overall cost of capital? Suggested steps to find overall cost of capital: Identify b equity at the target debt-equity ratio Identify appropriate
1.What is Marriott's overall cost of capital?
Suggested steps to find overall cost of capital:
Identify bequity at the target debt-equity ratio
Identify appropriate estimate of risk-free rate rf
Identify estimate of market risk premium (rm-rf)
Use CAPM to estimate requity
Identify appropriate measure of rdebt
Use formula: rWACC = (1-TC)[D/(D+E)]rdebt + [E/(D+E)]requity
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New Venture Creation A Framework For Entrepreneurial Start-ups
Authors: Paul Burns
2nd Edition
1352000504, 978-1352000504
