Background Information On September 23, 2016. Marriott completed the acquisition of the Startwood Hotels & Resorts Worldwide. Marriott paid $13.3 billion for Starwood. Did Marriott overpaid or get a good deal? What needs to happen to make the acquisition worthwhile for Marriott? Let's find out. Instructions: 1. Click the link to read the article about the Extended Stay valuation. (https://tinyurl.com/wmdepzmb). 2. Use the attached historical cash flows as the base to estimate next 10 years' cash flows (2016-2025) as in the Extended Stay article. Explain how you decide the cash flow and its growth rate. This article (https://tinyurl.com/2w44a7wp) has good information to help you with the cash flow and discount adjustments. 4 points) Follow Technique 4: 10-year DCF in Chen & Kim (2010) in Week 4 to calculate the present value of Starwood. Show your calculation on this spreadsheet. Please justify your choice of the terminal cap rate and discount rate (i.e. required return) in the box below. You can use the information from the assigned articles, the Hotel Perennial case, or anything you find on the Internet. Please include the citations, (6 points) For the purpose of this assignment, assume Operating Cash Flow is the Levered Free Cash Flow needed for the calculation. Data Date Operating Cash Flow By ore auton messe 12/31/2001 761 12/31/2002 706 M 12/31/2003 771 12/31/2004 578 12/31/2005 764 12/31/2006 500 12/31/2007 895 Fun sof 11th 12/31/2008 646 View 12/31/2009 571 12/31/2010 764 12/31/2011 641 12/31/2012 1184 12/31/2013 7151 12/31/2014 994 12/31/2002 706 12/31/2003 12/31/2004 578 12/31/2005 12/31/2006 500 12/31/2007 895 12/31/2008 646 12/31/2009 571 12/31/2010 12/31/2011 641 12/31/2012 1184 12/31/2013 1151 12/31/2014 890 12/31/2015 Background Information On September 23, 2016. Marriott completed the acquisition of the Startwood Hotels & Resorts Worldwide. Marriott paid $13.3 billion for Starwood. Did Marriott overpaid or get a good deal? What needs to happen to make the acquisition worthwhile for Marriott? Let's find out. Instructions: 1. Click the link to read the article about the Extended Stay valuation. (https://tinyurl.com/wmdepzmb). 2. Use the attached historical cash flows as the base to estimate next 10 years' cash flows (2016-2025) as in the Extended Stay article. Explain how you decide the cash flow and its growth rate. This article (https://tinyurl.com/2w44a7wp) has good information to help you with the cash flow and discount adjustments. 4 points) Follow Technique 4: 10-year DCF in Chen & Kim (2010) in Week 4 to calculate the present value of Starwood. Show your calculation on this spreadsheet. Please justify your choice of the terminal cap rate and discount rate (i.e. required return) in the box below. You can use the information from the assigned articles, the Hotel Perennial case, or anything you find on the Internet. Please include the citations, (6 points) For the purpose of this assignment, assume Operating Cash Flow is the Levered Free Cash Flow needed for the calculation. Data Date Operating Cash Flow By ore auton messe 12/31/2001 761 12/31/2002 706 M 12/31/2003 771 12/31/2004 578 12/31/2005 764 12/31/2006 500 12/31/2007 895 Fun sof 11th 12/31/2008 646 View 12/31/2009 571 12/31/2010 764 12/31/2011 641 12/31/2012 1184 12/31/2013 7151 12/31/2014 994 12/31/2002 706 12/31/2003 12/31/2004 578 12/31/2005 12/31/2006 500 12/31/2007 895 12/31/2008 646 12/31/2009 571 12/31/2010 12/31/2011 641 12/31/2012 1184 12/31/2013 1151 12/31/2014 890 12/31/2015