Definition of the Feel Good Company Essay Example | Topics and Well Written Essays - 2000 words

Definition of the Feel Good Company - Essay Example Feel Good addresses the need for variety and flexibility. The Company has been performing well because it has sold a million bottles of its products every month in the year 2007. This kind of performance is relatively good indicating that the company's market share is on a steady rise. The market for soft drinks is cross generational and surpasses most age groups. However more emphasis is placed on the younger generation because they are the ones who are keen on new products and easily embrace emerging trends. (Jefkins, 1994) The company offers a range of chilled juices and fizzled drinks. The market is segmented into groups of people who take their meals at different times of the day. There are the lunchbox and breakfast markets. The Company's main competitors are the well established names in the fizzled drinks sector. These are companies like Coca Cola and Pepsi. This means that the company has to compete against the strong brand image that Coca Cola has established. This company is also characterised by strong captivating advertisements and promotions. Pepsi is also acclaimed for its reputable brand image. Feel Good Drinks also has to compete against other companies that produce chilled juices. These include Tropicana and Minute companies. Some of the brands which Feel Good has introduced that compete against the latter mentioned companies include Tangerine, Mandarin and Apple; Golden Kiwi and Lime. Key marketing objectives that need to be addressed Establishing a strong brand image for Feel Good Company-the Company is competing against a number of well established companies and needs to impact consumers with a captivating image. (Assmus and Farley, 1984) Making the products offered stand out- Customers need to be able to identify the company with something unique. There are a number of drinks in the market and Feel Good needs to inform customers that it is the best choice using its marketing tools. Ensure that the products offered by the company make the customers feel good after purchasing the item-this is the main reason that will maintain a steady flow o customers because they will not regret the choice they have made to purchase the item. Marketing communications strategy Evaluation of marketing communication tools The first alternative that Feel good can use is the internet. The internet allows the company to have a geographically wider market thus enabling the products to reach a wider audience. This communications tool has a low cost set up due to its low barrier in the entry to the products market. (Masaki and Helsen, 2004) Another element is personal selling; this marketing communication tool could be used by the company to get its products in the market, pushing the consumers to the point of purchasing the products. Personal selling is a way of maintaining personal customer relations in which the sales person will be acting on behalf of the company, these person should be trained and should be having the personal selling techniques, though hiring them is expensive the company could use them because there is a genuine return on investments. Feel Good can also use exhibitions to make new contacts and renewing old contacts. This will be used to increase the awareness of products to the consumers thus

Study Guide Essay Example for Free

Study Guide Essay Why is Fort Sumner signi? cant in relation to the Civil War? 2. List advantages held by the Confederates at the beginning of the Civil War? 3. List advantages held by the Union at the beginning of the Civil War? 4. Identify a copperhead. 5. Identify writ of habeas corpus. Why did President Lincoln suspend this during the war? 6. What were the three parts to the Union military strategy known as the anaconda plan? 7. Why was the confederate General Stonewall Jackson successful at the ? rst Battle of Bull Run? 8. Identify Union General, George McClellan 9. What was the purpose of the Emancipation Proclamation? 0. Describe the Economy of the north during the Civil War. 11. List hardships experienced by soldiers during the Civil War? 12. What is Andersonville? 13. Who did President Lincoln name as commandeer of union troops from 1864 to the end of the war? 14. Why did General William Sherman burn the city of Atlanta in 1864? 15. Identify Sherman’s March to the Sea. 16. Describe â€Å"total war† 17. What did the Democratic platform consist of during the presidential election of 1864? 18. Why is Appomattox Courthouse signi? cant during the Civil War? 19. Who was the President of the United States during the Civil War? 20. How did John Wilkes Booth impact the history of the United States? 21. Identify the Battle of Shiloh. 22. Identify the Battle of Atlanta. 23. Identify the Battle of Antietam. 24. Identify the Battle of Gettysburg. 25. Identify the Battle of Vicksburg. 26. List characteristics of the Civil War. 27. What was the purpose for the Gettysburg Address? 28. Who was the President of the Confederate States of America? 29. List characteristics of the Union. 30. What was the signi? cance of the 54th Massachusetts during the Civil War? 31. List characteristics for Abraham Lincoln. 32. Know general facts about the Civil War.

Advantages Of Standard Costing Accounting Essay

Advantages Of Standard Costing Accounting Essay Despite the advantages just noted for some applications of standard costing, there are substantially more situations where it is not a viable costing system. Here are some problem areas: Cost-plus contracts. If you have a contract with a customer under which the customer pays you for your costs incurred, plus a profit (known as a cost-plus contract), then you must use actual costs, as per the terms of the contract. Standard costing is not allowed. Drives inappropriate activities. A number of the variances reported under a standard costing system will drive management to take incorrect actions to create favorable variances. For example, they may buy raw materials in larger quantities in order to improve the purchase price variance, even though this increases the investment in inventory. Similarly, management may schedule longer production runs in order to improve the labor efficiency variance, even though it is better to produce in smaller quantities and accept less labor efficiency in exchange. Fast-paced environment. A standard costing system assumes that costs do not change much in the near term, so that you can rely on standards for a number of months or even a year, before updating the costs. However, in an environment where product lives are short or continuous improvement is driving down costs, a standard cost may become out-of-date within a month or two. Slow feedback. A complex system of variance calculations are an integral part of a standard costing system, which the accounting staff completes at the end of each reporting period. If the production department is focused on immediate feedback of problems for instant correction, the reporting of these variances is much too late to be useful. Unit-level information. The variance calculations that typically accompany a standard costing report are accumulated in aggregate for a companys entire production department, and so are unable to provide information about discrepancies at a lower level, such as the individual work cell, batch, or unit. The foregoing list shows that there are a multitude of situations occur where standard costing is not useful, and may even result in incorrect management actions. Nonetheless, as long as you are aware of these issues, it is usually possible to profitably adapt standard costing into some aspects of a companys operations. Advantages of Standard Costing Though most companies do not use standard costing in its original application of calculating the cost of ending inventory, it is still useful for a number of other applications. In most cases, users are probably not even aware that they are using standard costing, only that they are using an guesstimate of actual costs. Here are some potential uses: Inventory costing. It is extremely easy to print a report showing the period-end inventory balances (if you are using a  perpetual inventory  system), multiply it by the standard cost of each item, and instantly generate an culmination inventory valuation. The result does not exactly match the actual cost of inventory, but it is close. However, it may be necessary to update standard costs frequently, if actual costs are continually changing. It is easiest to update costs for the highest-dollar mechanisms of inventory on a frequent basis, and leave lower-value items for intermittent cost reviews. Overhead application. If it takes too long to aggregate actual costs into cost pools for allocation to inventory, then you may use a standard overhead application rate instead, and adjust this rate every few months to keep it close to actual costs. production costs at different volume levels, since this may call for the use of longer production runs that are less expensive. Budgeting. A budget is always composed of standard costs, since it would be impossible to include in it the exact actual cost of an item on the day the budget is finalized. Also, since a key application of the budget is to compare it to actual results in subsequent periods, the standards used within it continue to appear in financial reports through the budget period. Price formulation. If a company deals with custom products, then it uses standard costs to compile the projected cost of a customers requirements, after which it adds on a margin. This may be quite a complex system, where the sales department uses a database of component costs that change depending upon the unit quantity that the customer wants to order. This system may also account for changes in the companys Nearly all companies have budgets and many use standard cost calculations to derive product prices, so it is apparent that standard costing will find some uses for the foreseeable future. In particular, standard costing provides a benchmark against which management can compare actual performance. Following through all the arithmetics of variances I have pin pointed reasons for the Material Price Variance, Material Usage Variance, Labour Efficiency Variance, and Labour Rate Variance. Material Price Variance occurs a failure to purchase the standard quality, thereby resulting in a difference price paid. This will lead into bad purchasing, in which is very discomforting the companys interest such as a rush purchase for an uneconomical markets, and also pushes a purchase of a substitute material on account of non-availability of the material specified by the company. This all are related to the interdependence at variances when it ensues an event has a favorable impact on one variance but an adverse impact on another variance. For example, the purchase of inferior quality materials may account for a favorable price variance but it may also have a negative impact on the material usage labor efficiency variance due to the quality causing an increase in usage. The adverse may also be affected by inflation and general increase in the market price. In such circumstances the selling price should be altered to refract the current market. Material Usage Variances may be affected by a whole lot of reasons such as carelessness in the use of material also affect the reason of material usage in resulting excessive consumption. Which brings us to the use of defective or sub-standard material that will cause spoilage to the material. Other reasons such as a change in t plant and machinery who also results to excessive consumption of material. The adverse on the variances is due to excess issues. Managers should check the stock are securely locked away that only the standard quantity is issued each day. And its not just that, There are a few more such as : Faulty workmanship Faulty material processing Pilferage of materials Use of material mixture, rather than standard mixture Labour Efficiency Variance is affected because of the actual hours used is greater than the standard hours, and it adverse is due to the use of an inappropriate standard that should be changed. Alternatively, there may have been idletime, ten working time should be synchronized. Bridget, C. (2012).  Standard Costing.  Available: http://www.accountingtools.com/standard-costing. Last accessed 28th Oct 2012.

Brief History of the National Rifle Association :: NRA Guns Historical Militia Essays

Brief History of the National Rifle Association   Ã‚  Ã‚  Ã‚  Ã‚  The National Rifle Association in its simplest form is the largest gun club in the world. The organization was founded in 1871 by former Union Army officers to encourage sport shooting in order to have a fine tuned militia in case of emergency. The Union officers believed that a well regulated militia was integral for the security of a free state. It is an organization that opposes gun control, it believes in the individual defense of the uses of firearms, and it is interested in all aspects of shooting sports.1   Ã‚  Ã‚  Ã‚  Ã‚  Today, the organization stands with approximately 3.4 million members. Within the NRA, there are four major organs. The Institute for Legislative Action (is the lobbying arm), the political Victory Fund (which is a political action committee), the Civil Rights Legal Defense Fund (deals with scholarly research and legal developments), and the Grass Roots Division (which specializes in raising support through grass roots methods). As a membership organization, the NRA's directions is set by voting members. The direction of the policies are carried out by a 75 member board that is geographically distributed. The Board of Directors are elected by secret ballot.2 Brady Act   Ã‚  Ã‚  Ã‚  Ã‚  The Brady Act was approved by Congress in November of 1993 and was then signed into law by President Clinton later in the month. The act was originally named for anti gun lobbyist Sarah Brady, and not for former press secretary Jim Brady. It was through Jim Brady's support and the media coverage that linked his name to the act. The act requires that there be a waiting period of five state government business days at the time an individual applies to purchase a handgun from a federal firearm license. During the five day wait, the local sheriff or police chief must "make a reasonable effort" to see if the purchaser is prohibited from owning a handgun. The police official may approve the sale before the five day period only if the record check has been completed or if he believes the purchaser needs a handgun immediately to protect himself or his family.3   Ã‚  Ã‚  Ã‚  Ã‚  Presently, the Clinton administration isn't complying with the Brady Act. The act requires that within 60 months of enactment, the Attorney General must establish a national instant criminal background check system that allows federal firearms licensees to have access through some type of electronic method. The reason for the delay lies with the fact that U.S. Circuit Courts have split on whether the Brady Act violates the 10th amendment of the Constitution by allowing law enforcement agencies to conduct criminal records checks in

Market Structure in Aircraft Manufacturing

Market structure in the aircraft manufacturing industry The market for commercial passenger aircraft is an oligopoly dominated by Boeing and Airbus. Critically evaluate competitive factors which influence firm growth, new product Development and pricing in the commercial aircraft market. [60%] How is the commercial aircraft market different from the market for personal computers, In terms of market structure, new product design and growth opportunities? [40%] Ensure that you make use of an appropriate economics based theoretical framework Which employs suitable concepts developed in this course, as well as appropriate examples? Oligopoly is a form of market structure known as imperfect competition a) There are a small number of players or firms which have and exercise market power for example supermarkets in the uk. In aircraft manufacturing industry it is even more concentrated there is only two major players namely Airbus and Boeing. Implications are that the importance of a small number of large customers makes it sensible for suppliers to invest heavily in close long term relationships with them. Key account management is essential considering 80% of output is being to 20% of customers. ) Products are differentiated which allows firms to price them differently. c) High capital usage(and large fixed costs)and research and development mean that the optimal firm size is very large, resulting in a small number of sellers(producers/firms). d) Huge impacts of patents and research and development costs, as well as intellectual property rights. e) Economies of scale f) High government regulation(health and safety)recently Air has had a number of problems with Royce Royce engines on the A380 which has led to a number of planes being grounded

Marriott Corporation Essay

Each of these aspects of the financial strategy support Marriott’s growth objective, except for the repurchasing of undervalued shares, which is not based on feeling of significant undervaluing of the stock by the market, but based on an internally generated intrinsic value of the company. Marriott’s cost of capital estimation process involves consideration of debt capacity, cost of debt and cost of equity. This data, plus consideration of capital structure and effective tax rate, is then applied to the Capital Asset Pricing Model, using the U.S. Government 10-year bond as the risk-free rate and the spread between the S&P 500 composite and the U.S. Government 10-year bond rate. Beta is based on the last five years of monthly return data. The resulting corporate WACC is 10.22%. However, new investments in the different divisions requires the application of a hurdle rate that reflects the business risk of that particular unit, rather than the overall   corporate hurdle rate, which is primarily applicable to corporate capital expenditures, such as headquarters and IT support systems. The table below summarizes the WACC for each Marriott division based on its mix fixed and floating rate debt, capital structure, and applicable unlevered beta for its industry. Introduction Marriott Corporation is diversified company in the lodging, restaurant and contract services. Its lodging business unit consisted of managing the operation of 361 hotels of a variety of star ratings. Its restaurant business unit ran and owned a handful of fast food and diner chains. One of the perennial challenges that Marriott management faced was the close integration of its financial strategy, growth objectives, determining the appropriate hurdle rate for investments, and how to add a capital cost component to incentive compensation plans. Marriott’s Financial Strategy The overall objective for Marriott’s vice president of project finance, Dan Cohrs, was to support the company’s growth objective in being the most profitable company in its lines of business. To support this growth objective, Marriott developed a financial strategy that consisted of four tactics – manage rather than own hotel assets, invest in projects that increase shareholder value, optimize the use of debt in the capital structure, and repurchase undervalued shares. Manage Rather than Own Hotel Assets Marriott would develop hotel properties and then sell them off to investment partnerships. Its typical deal would consist of it being granted a long-term contract to operate and manage the property on behalf of the owner, where it receives 3% of revenues as compensation and 20% of profit over and above a specified return for the owner. If you wanted to maximize growth and shareholder value, this was a more prudent approach to being in the lodging business because the company wouldn’t be held down by large amount of debt associated with these properties and it eliminated a lot of long-term market risk. If a hotel went under, Marriott’s risk was limited to the portion of debt that it guaranteed instead of the entire amount. Therefore, this tactic supported the company’s growth objective because it did not tie up huge amounts of investment capital in fixed assets and allowed it to focus on activities and projects that could generate significant revenue growth. If Marriott could make a hotel very busy, it only had to make small increases in staff to accommodate large increases in business. Plus, its profitability would accelerate once it was able to clear its property owner’s return requirement. By being service oriented, Marriott greatly reduced the capital intensity of its lodging business unit. Invest in Projects That Increase Shareholder Value Technically speaking, this is a tactic espoused by every company. Marriott purposed to only invest in NPV positive projects based on the hurdle rate appropriate for the type of investment. The pro forma cash flows for investment opportunities were developed at the division level using corporate templates. This provided consistency in methodology while allowing for variation in unit specific assumptions. This will also support the company’s growth objective because it promotes Marriott getting the best results for its investment funds to maximize the value created by the projects it invests in. It also means that projects in riskier areas have to be that much profitable to generate the NPV to make an investment competitive versus alternative investments in less risky units. Optimize the Use of Debt in the Capital Structure Marriott used a targeted interest coverage ratio to determine its optimal use of debt instead of a debt-to-equity ratio. Because this approach bases debt capacity primarily on financial operations instead of market capitalization, it is supportive of growth by limiting debt based on near term financial performance rather than the ups and downs of the capital markets. Repurchase Undervalued Shares Marriott calculated its own valuation of its stock called its warranted equity value. Whenever its stock price went below the warranted value, Marriott would buy back stock. This tactic does not support growth because Marriott is using an intrinsic value of its stock to supersede the market value of the stock, which is the best indicator of the value of a publicly traded company. The company also assumed that this was the best use of cash and debt than investments. Although companies have used debt to repurchase stock, it is usually to try to â€Å"game† the system and improve the profitability related financial ratios by reducing the amount of total equity and the number of shares outstanding. Three more legitimate reasons for Marriott to buy back its stock would be mitigate the impact of stock dilution due to the exercise of stock options used as incentive compensation; to disburse excess funds to shareholders without the tax penalty associated with dividends; or to cheaply remove stock when the market it trading it at a steep discount to historical trends when the company is performing well. Buying back stock when it falls a small amount below an intrinsic value does not contribute to growth and those funds could have probably been used in a profitable, value-increasing project. Marriott’s Cost of Capital Estimation Process Marriott uses the weighted average cost of capital (WACC) to determine its corporate hurdle rate, as well as estimate the hurdle rates for its different divisions. The process begins with the company determining its debt capacity, cost of debt and its cost of equity, also being a function of the amount of debt. After determining the corporate level cost of debt, it allocated a portion of that debt to each of the business units to facilitate their unit hurdle rates. Each unit had a different debt weighting and cost of debt. Marriott annually updated its cost of capital for making investments. It does make sense for Marriott to determine a hurdle rate for its different business units because it is a diversified company, even if it is related diversification. Its business units carry the business risk of the industries they inhabit, regardless of the corporate make up of Marriott. To make the best use of Marriott funds and maximize value, Marriott has to take into account the risk associated with each unit’s projects. Having a hurdle rate for each business unit eliminates bias in project selection that would occur if it used the corporate hurdle rate. Marriott’s Corporate Weighted Average Cost of Capital In its use of the weighted average cost of capital (WACC) formula below, Marriott uses its long-term debt to total capital ratio (total capital = total assets – current liabilities) for its debt weighting. Cost of Equity To determine the cost of equity, Marriott used the Capital Asset Pricing Model (CAPM), which relates the returns for a single stock against the excess returns for the market over the risk-free rate. Marriott has a target debt percentage in capital of 60% for the company. Its 1987 debt percentage is 58.8% for which a beta of 1.11 was calculated based on the past five years of monthly returns. The average corporate tax rate for the past five years is 43.7%. The target debt percentage in capital is 60% and is treated as the debt-to-value ratio. For the target percentage the beta must be unlevered and then relevered based on the equation below. This produces a relevered beta of 1.135. The market risk premium is based off of the spread between the S&P 500 composite returns and long-term U.S. government bond returns of 7.92%. The risk-free rate is 8.72% based on the 10-year U.S. government bond maturity rate. Using the CAPM equation below, this produces a cost of equity of 17.71%. Cost of Debt Marriott has fixed and floating debt. Its projected mix will be 60% fixed debt and 40% floating debt. Overall, Marriott has estimated that its debt risk premium is approximately 1.30% above U.S. government debt securities. Fixed rate corporate debt is going to be consistent with 10-year maturity U.S. government debt and the floating rate debt is going to be consistent with 1-year maturity U.S. government debt. The 30year debt is not applicable because Marriott manages rather than owns the hotel properties it manages. The resulting weighted cost of debt is 9.29%. Debt Type Corporate or Firm Level WACC By applying Marriott’s corporate cost of debt and cost of equity from the previous sections, we calculate a WACC of 10.22%. Which Investments Can the Corporate Hurdle Rate by Applied To? The corporate or firm level hurdle rate cannot be applied to all projects because of the bias it presents when business units have less or more risk than the company as a whole. However, there are investments to which the corporate hurdle rate would be applicable. That would involve any capital expenditures on behalf of the corporate parent, including buildings, as well as enterprise resource systems and any other support systems that serve all three business units. For example, the three business units should be using the same system to do financial reporting and accounting. If Marriott only used the corporate hurdle rate for all investments, in the long-run, it would do poorly because the rate would cause the company to invest in projects that are too risky and avoid projects that could increase company value. Basically, Marriott would be worth a lot less than it otherwise would have if it didn’t take a one-size-fits-all approach to its hurdle rate for different projects in the business units. Or worse, it could go out of business or be acquired by a competitor that had a more rational approach to its project selection process and was able to buy Marriott with the value it had created. Cost of Capital for Individual Divisions The process that Marriott employs to determine the corporate hurdle rate can also be applied to its different divisions. For the lodging and restaurant divisions, the cost of equity can be determined by using the weighted average unlevered beta for a group of peer companies and then relevering the beta for that division’s leverage circumstances. Contract services will require a residual approach for determining its cost of capital. Peer groups were used to calculate weighted average unlevered betas for the groups, using 46% as the highest marginal corporate tax rate for the fiscal year ended June 30, 1987. For the lodging and restaurant divisions, the same risk-free rate and market risk premium was used. Although both divisions own long-lived assets, they are closer to 10-year versus 30-year assets, other than any facilities owned. As for the lodging and restaurant properties, the bulk of the capital investment is made in renovation, updating or modernizing hotel properties and updating of the restaurants. For example, Marriott will periodically update the furniture, dà ©cor, color and amenities at the properties it manages to keep them competitive. This is a regular part of the business, so long-lived assets in those properties would be replaced anyway. This even occurs in restaurants, although less frequently. Contract services would also operate its long-lived assets in the same time frame. To determine the cost of equity for the lodging division, a group of peer companies were gathered and key data related to capital structure, revenue and beta was compiled to calculate a weighted average unlevered beta for the group. That beta was relevered based on the lodging divisions projected debt percentage in capital of 74% as the debt-to-value ratio for the operating unit, resulting in a cost of equity of 20.13% To determine the cost of equity for the restaurant division, a group of peer companies were gathered and key data related to capital structure, revenue and beta was compiled to calculate a weighted average unlevered beta for the group. That beta was relevered based on the lodging divisions projected debt percentage in capital of 42% as the debt-to-value ratio for the operating unit, resulting in a cost of equity of 19.08% With the cost of debt and cost of equity relative to its industry, the restaurant division cost of capital is equal to 13.45%. Contract Services Division To calculate the cost of capital for the contract services is more complex because there aren’t any publicly traded peer companies to compare against and privately held firms either do not report their results or do not report results compliant with the financial reporting requirements of publicly traded companies. Based on the projected mix of fixed and floating debt, the cost of debt for the contract services division is estimated at 10.07% A residual approach will be required to determine the cost of equity for the contract services division according to the formula below using the unlevered betas, weighted by identifiable assets. Solving the formula for ÃŽ ²C will provide us with the last piece of information needed to calculate its cost of capital. This results in an unlevered beta of 0.610. Based on the projected capital structure of the division, it levers to a beat of 0.839. With the cost of debt and cost of equity applicable to this business unit, the contract services division cost of capital is equal to 11.33%. Conclusion There are already many assumptions made in a traditional cost of capital calculation for a single-industry company. When a company is diversified, like Marriott, it cannot use a single corporate cost of capital for making investment decisions. It must make decisions for each division according to the business risk faced by that business unit because the level of risk varies from industry and that must be accounted for. Otherwise, a firm will engage in biased decision-making, if they use discounted cash flow and net present value for making investment decisions because a single hurdle rate will inflate the value of some projects, while lowering the value of others. Epilogue To stay competitive and generate the most value that they can for shareholders, companies review and update their strategies. Marriott Corporation is no different. Not long after the time period associated with this case, Marriott began to take dramatic steps to maximize shareholder value. First, the company sold is restaurant operating division in 1990 (White, 1989). The competition from industry leaders was too intense and rapid expansion would have required a lot of additional capital. Subsequently, the company would go through multiple spinoffs. In 1993, the company spun off Marriott International, which managed and franchised hotels and retirement communities (Marriott International, 2012). The remaining company changed its name to Host Marriott Corporation and owned many of the properties managed by Marriott International. In 1995, Host Marriott Corporation spun off some of the contract services business with the name Host Marriott Services. This allowed Host Marriott Corporation to focus on its real estate assets. In 1998, Marriott International spun off its management services business in a merger with Sodexho to create Sodexho Marriott Services. Later that year, Host Marriott Corporation spun off is senior retirement real estate business as Crestline Capital Corporation. At the end of 1998, Host Marriott Corporation converted into a real estate investment trust called Host Hotels & Resorts (Marriott International, 2012). The last spin off conducted by Marriott International occurred towards the end of 2011, where it spun off its time share operating segment as Marriott Vacations Worldwide Corporation (NYSE: VAC). Marriott International is only involved in lodging now and reorganized into four lodging divisions – North American Full-Service, North America limited-service, International Lodging and Luxury Lodging. In terms of the financial strategy outlined by the Marriott Corporation in 1987, that strategy continues in Marriott International. It doesn’t own the properties. It just manages and franchises them. At the end of fiscal year 2011, its debt-to-market value ratio is 0.1579. The company appears to be attempting to minimize the amount of debt it uses. The cost of debt is approximately 5.485% and the cost of equity is approximately 11.44%. Marriott International’s WACC, based on 2011 financial statements is 10.12%. References Marriott International (2012). 2011 Annual Report. Retrieved from http://investor.shareholder.com/mar/sec.cfm?DocType=&DocTypeExclude=&Sort Order=FilingDate%20Descending&Year=&Pagenum=4 Marriott International (2012). Frequently Asked Questions. Retrieved from http://investor.shareholder.com/mar/faq.cfm White, G. (1989, December 19). Marriott to Sell Its Restaurants, Focus on Hotels : Services. LA Times. Retrieved from http://articles.latimes.com/1989-1219/business/fi-598_1_marriott-s-bob-s-big-boy