12311

1. Manage rather than own consistent with growth strategy, because Marriot gives an opportunity to invest more in the future, and share some risks with limited partners, thus, Marriot attracts capital in some way, and also might save on taxes. Invest in projects that increase Shareholder value consistent with growth, because NPV projects are positive, and it will increase SH value. Optimizing capital structure consistent with growth, because optimal capital structure always should lead to a higher shareholder value, and gives a good way to control default risk due to they aiming at certain coverage ratio. Repurchase of undervalued assets. It depends.

Because it can lead to a lower growth, because company uses it’s free funds to buy back shares. Buy backs will lead to overpricing of Marriot’s shares. This strategy implies that Marriot is batter than the market is. If shares are temporary undervalued, than it might be a cheap way of paying dividends to shareholders.(红色字体部分我胡写的，麻烦你改一下)

2. Marriott used the Weighted Average Cost of Capital (WACC = (1 – t) rd (D / V) + rE (E/V)) to measure the opportunity costs for company investments that have similar risk. Where T is the corporate tax rate. Furthermore, rD is the division’s cost of debt before tax, rE is the cost of equity after tax, D is the market value of debt and E is the market value of equity. V is the firm value (V=D+E). Marriott is order to measure WACC, it calculate the return of equity first, which is rE=risk free rate +Beta of Equity*(market premium). Market premium =E(Rm)-Rf. Next, it according to the suitable hurdle rates to selects investment projects. Hurdle rates are could make manager supervised the company’s performance more efficiently. In addition, the different projects could make risk diversified across the company. Moreover, the distinction between floating rate and fixed coupon rate debts will ignored