I provide several guideline questions for each case. These questions are designed to help you streamline the issues to be addressed. Do not organize your report as a list of answers to these questions. If you believe that these questions do not effectively address the problems in the case, feel free to go outside the parameters of the questions.
Case 1. Investment Analysis and Lockheed Tri Star
The case consists of five parts. Each part has very specific questions. No additional guideline questions are provided.
Both Group 1 and Group 2 will submit the answers to Exercise 1-4, in addition to a 2-page report on the mini-case. The write-up on Exercise 1-4 can be organized as a list of answers to the questions asked. However, the write-up on the mini-case should be in the format as described in the case guidelines.
For presentations, Group 1 will present Exercise 1, 2, 3, and 4.
Group 2 will present the mini case "Lockheed Tri Star".
Case 2. Marriot
1. How does Marriott use its estimate of its cost of capital? Does this make sense?
2. What is the weighted average cost of capital for Marriott Corporation?
3. What type of investments would you value using Marriott's WACC?
4. What is the cost of capital for the lodging and restaurant divisions of Marriott?
5. What is the cost of capital for Marriott's contract services division? How can you estimate its equity costs without publicly traded comparable companies?
6. If Marriott used a single corporate hurdle rate for evaluating investment opportunities in each of its lines of business, what would happen to the company over time?
Both Group 3 and Group 4 will write a report on the entire case. But for presentations, Group 3 will skip the contract services division...