... could make adjustments as such broad assumptions may not be appropriate for all divisions. They also take on projects that are similar. This helps with the accuracy of estimates as past performance can be analyzed. Optimize the use of debt in the capital structure Marriott realized that it can grow by expansion and that expansion requires the use of debt. Repurchase undervalued shares Marriott carefully determined what its share price should be through a detailed analysis of its value. When the share price fell below this value, it buys back shares. It does a thorough analysis such that when price falls it does not reevaluate the hurdle rate used to make the price estimate. Therefore, their justification for buying the shares and finding a value and growth opportunity in its own equity is good. 2) How does Marriott use its cost of capital estimate? Marriott determined a separate WACC as the measure of cost of ...

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