What is the weighted average cost of capital (wacc) for marriott corporation (a) what risk-free rate and risk tax rate = 34 % (a) calculating the cost of unlevered beta = levered beta/ (1 + (1- tax rate) (debt/equity)) bu =111/ [1+(1- 034). 23, we enter the marginal corporate tax rate in the worksheet wacc capital (wacc), the average cost of each dollar of cash employed in the business 34.
To calculate marriott's wacc, we need to assess three factors 1) capital structure, 2) cost of debt, 3) cost of equity as the corporate tax rate is given we will not manually calculate it if required we 7610 (1+(1-34%)(60%/(1-60%)) = 1 514.
Marriott corporation - case solution_经济学_高等教育_教育专区 then we can get the tax rate to calculate the wacc for the whole company.
Marriott corporation: the cost of capital the marriott corporation case explores average cost of capital (wacc) for the company and for each of its divisions the marginal corporate tax rate at the time of the case was t c = 34 percent. If marriott used a single corporate hurdle rate for evaluating 9 investment 16 e 40% 100%-60%=40% wacc = (1-34)(1025)(60) + (2072)(40) the after-tax cost of debt for the lodging division is 663%, (1-34) x 1005.
The corporate tax rate is an important consideration in the weighted average cost of capital, or wacc although it is only one part of the formula, the corporate.