... or the corporation as a whole. In calculating WACC, the cost of capital for the corporation as a whole should be different from the divisions because investments made in each division would have different risk levels than the average risk of Marriott assets. A modified version of WACC should be used to determine whether or not the divisions should go ahead on projects or not. To modify the WACC, first an appropriate level of WACC should be set on each division. Subsequently, each project within each division should be analyzed to determine the risk level. If the project is high in risk compared to others in the division, then the WACC should be increased due to the risk. If the project is lower in risk compared to other projects in the division, then WACC should be lowered to account for the lower risk. If the risk is at the same ...

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