Marriott Corporation: The Cost of CapitalWhat is the weighted average cost of capital for Marriott Corporation?Are the four components of Marriott's financial strategy consistent with its growth objective?Marriott Corporation It is an international company and growth over the year has been more than satisfactory. In 1987, Marriott's sales grew 24 percent and its return on equity was 22 percent. Furthermore, the share of sales and profits doubled compared to the previous year. The company operates in three divisions: lodging, contract services and restaurants which accounted for 41%, 46% and 13% of sales respectively in 1987. Marriott is determined to develop and improve its position in each division. This main goal contains 3 other more detailed components: - Become the most profitable company. - Be the employer of choice. - Be the supplier of choice. To achieve its goal, Marriott executives developed a financial strategy with 4 decisions principals.Manage rather than own the hotel's resources.The first measure is simply to be more involved in the management of your hotel. It means for the company to have more control over how the money is used but also to have greater responsibilities towards employees and especially customers. The company is able to monitor and control its resources and expenses. By having more control, Marriott can look to improve its efficiency and profitability, for example, by sourcing the best suppliers with long-term contracts for what the business really needs, which could reduce unnecessary expenses. There is another benefit if Marriott performs well increase their profit; Marriott will be able on the one hand to increase the salary of its employees and on the other to improve the quality of services provided to customers. Investing in projects that increase shareholder value This objective is one of the financial objectives to invest in appropriately. Marriott used cash flow discounting techniques to evaluate the potential investment. It is beneficial because it is considered present time value. Projects that increase shareholder value could be delivered with benchmark rates, the company can guarantee a return on projects that translates into a profitable and competitive advantage. Optimize the use of debt in your capital structure. Marriott invests a lot of money in long-term assets which is why it is really necessary for the company to maximize and optimize its debt. And the company has an A rating. This means that Marriott is able to borrow a significant amount of money to invest and could be heavily leveraged.