1.What is Marriott's overall cost of capital?
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1.   What is Marriott's overall cost of capital?



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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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