Q1 Goals of marriot Company?

Ans: 1.Intend to remain premier growth company

2. Aggressively developing appropriate opportunities within existing line of
business.
3. To be the preferred employer, preferred provider, and the most profitable
company.

Q2 what is incentive compensation?

Ans: Compensation -> It means giving money to persons in exchange of their goods
or money or labor.
Incentive compensation: It is a type of compensation based on the performance of
the of a group of people or a company. These compensations are made to keep key
employees in the company, identify with shareholders.

Q3 If hurdle rate decrease the profit of company, then why do they introduce it in
first place?
Ans:
Hurdle Rate: It is the min rate of return that must be met for a company to
undertake a particular project.
Why: to determine incentive compensation. Annual incentive compensation ranges
from 30%
to %0% of the basic pay.

Q4: Why company sold the hotel assets while retaining operating control as the
general partner under a long term contract rather than solding ?
Ans: management contract =
depreciation and services

3% of revenue + 20% of the profit before

The 3% usually covered cost of managing the hotel. Or in other way we can say
that they increased their profit by doing so.

Q5: What is warranted equity value? How does it help the marriot company?

Ans: warranted equity value= discounting the firms equity cash flows by equity
cost of capital.
It was checked by comparing Marriotts stock price with that of comparable
companies using price/earnings ratios for each division and by valuing each division
under alternative ownership structure, such as leveraged buyout. So whenever this
warranted ratio fell below a certain value, the company rebuys its own shares from
the market.
Q6: What is leveraged buyout?
A leveraged buyout (LBO) is a transaction when a company or single asset (e.g., a real estate
property) is purchased with a combination of equity and significant amounts of borrowed money,
structured in such a way that the target's cash flows or assets are used as the collateral (or
"leverage") to secure and repay the borrowed money.