Marriott Corporation” the Cost of Capital Essay Example for Free

Marriott Corporation† the Cost of Capital Essay What is the weighted average cost of capital for the Marriott Corporation and cost of capital for each of its divisions? – What risk-free rate and risk premium did you use to calculate the cost of equity? – How did you measure the cost of debt? – How did you measure the beta for each division? Solution What risk-free rate and risk premium did you use to calculate the cost of equity? – Risk-free rate proxy The risk-free rate is determined using the yields of U. S. Treasury securities, which are risk-free from default risk. U.S. Treasuries are subject to interest rate risk, therefore, the selected maturity should correspond to an investment horizon[1]. – Investment horizon According to the cost-of-capital calculation methodology used by Marriott Corporation, lodging division was treated as long-term, while restaurant and contract services divisions were treated as short-term because those assets had shorter useful lives. – Expected return proxy Arithmetic average return is more suitable than geometric mean as it is better in estimating an investment’s expected return over a future horizon based on its past performance (geometric mean is a better description of long-term historical performance of an investment). – Risk-free interest rate Taking into account the above, arithmetic average annual returns of long-term U.S. government bonds for the period 1951-1987 (4.88%, see Appendix 1) is  considered to be risk-free rate for lodging division. Arithmetic average annual returns of short-term U.S. government bonds for year 1987 (5.46%, see Case Exhibit 4) is considered to be risk-free rate for restaurant and contract services divisions. – Market proxy SP 500 index is selected as a market proxy as it is believed to be close to the true market portfolio. As it is important to use historical returns for the same market index used to calculate beta (which is given), an assumption is made that the given leverage data is calculated based on the same SP 500 index. – Market risk premium Market risk premium should be calculated for the same horizon as that used for the risk-free interest rate. Thus a spread between SP 500 composite returns and long-term U.S. government bond returns for the period 1951-1987 (7.88%, see Appendix 2) is a market risk premium for lodging division. A spread between SP 500 composite returns and short-term U.S. government bond returns for year 1987 (-0.23%, see Case Exhibit 5) is a market risk premium for restaurant and contract services divisions. How did you measure the cost of debt? Marriott Corporation and each division are given market value-target leverage ratios and credit spreads as well as U.S. government interest rates as of April 1988 (see Case Tables A and B). According to investment horizons discussed above, the following cost of debt is estimated: How did you measure the beta for each division? Ideally, when estimating beta by using past returns, time interval should be consistent with an investment horizon. Betas given in Case Exhibit 3 are estimated over 1986-1987 period. As these are the only betas given, they are assumed to be relevant for both long-term and short-term investment horizons. Equity betas of each division are calculated from comparable hotel and restaurant companies. Equity betas are then unlevered taking into account financing structure of each company according to the following formula: [pic], where Tax = 40% An average of unlevered betas of comparable companies is assumed to be a proxy for unlevered betas of Marriott divisions. For calculations of unlevered betas for each division see Appendix 4. What is the weighted average cost of capital for the Marriott Corporation and cost of capital for each of its divisions? WACC is calculated according to the formula given in the case taking into account the tax shield. Cost of equity is calculated according to CAPM model.

Juvenile Criminals Should Not Be Tried as Adults :: Juvenile Crime Jail Prison Essays

Juvenile Criminals Should Not Be Tried as Adults Today?s court system is left with many difficult decisions. One of the most controversial being whether to try juveniles as adults or not. With the number of children in adult prisons and jails rising rapidly, questions are being asked as to why children have been committing such heinous crimes and how will they be stopped. The fact of the matter is that it is not always the children's fault for their poor choices and actions; they are merely a victim of their environment or their parents. Another question asked is how young is too young. Children who are too young to see an R rated film unaccompanied are being sent to adult prisons. The only boundaries that seem to matter when it comes to being an adult are laws that restrain kids from things such as alcohol, pornography, and other materials seen as unethical. Children that are sent to adult prison are going to be subjected to even more unprincipled ideas and scenes. When children can be sent to jail for something as minor as a smas h and grab burglary, the judicial system has errors. The laws that send juveniles to adult prisons are inhumane, immoral, and unjust. Kids are often incompetent, which leads to unfair trials. Adult prisons are also very dangerous for minors, and in many cases this leads to more juvenile crimes. People support sending juveniles to adult prisons for many reasons. One reason is that it is the job of the courts to help protect society. Once a troubled juvenile is sent to an adult prison, they are out of the way of society. Hopefully when they re-enter, the punishments they received will be imprinted in their brain and stop them from performing any wrong again. Another reason people think that disturbed youth cannot be saved is that punishment will not save them from themselves and they just need to be locked up forever. It is thought to be true that juveniles who are sent to jail will not commit the same crime again or even any crimes at all. All the reasons and opinions that say that juveniles should be sent to adult prisons for their heinous crimes seem logical. Despite this, they are not. There are more rational reasons why adolescents should be sent to their own private penitentiary. One of the reasons for sending juveniles to a separate prison than

Hart and Positivism Essay

According to Hart law consists of primary and secondary rules. The primary rules are the rules that are â€Å"rules of obligation.† (Hart. Pg 204) This means that primary rules are rules that obligate a person to do something or to not do something. For example, the first Amendment, â€Å"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceable to assemble, and to petition the Government for a redress of grievances.† (http://www.usconstitution.net/const.html#Am1) The first Amendment is an example of a primary rule because it directly affects the people of the United States of America by allowing them to have the freedom of religion, press and expression. This is an example of obligating a person not to do something, which means that the person is not obligated to have any other religion other than their own, for example. The second part of law is the secondary rules. Secondary rules only affect primary rules. This means that a secondary rule can help clarify, alter, eliminate, bring into effect, verify or determine whether a primary rule has been broken. For example the only reason we have the first amendment of the United States Constitution is because of Article 5 of the U.S. Constitution which states, The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress; Provided that no Amendment which may be made prior to the Year One thousand eight hundred and eight shall in any Manner affect the first and fourth Clauses in the Ninth Section of the first Article; and that no State, without its Consent, shall be deprived of its equal Suffrage in the Senate. (http://www.usconstitution.net/xconst_A5.html) Article 5 of the constitution is a perfect example of a secondary rule (in this case a â€Å"rule of change†) because it allows one to see exactly how a secondary rule affects a primary rule. With Article 5 of the Constitution, the United States is capable of applying amendments to the constitution (or otherwise known â€Å"the Law of the Land†) of the United States. Article 5 of the constitution is an example of a secondary rule classified as a â€Å"rule of change† as stated by Hart. A â€Å"rule of change† allows an office or officials to be able to implement new primary rules so as to be able to adapt to the changing of times and the constant creation of new situations. The â€Å"rule of change† simply allows the system to be able to adapt to their society and not allow the primary rules to go static. To become a law there are two parts that need to happen, according to Hart. First there needs to be the initiation of a primary rule statute by a delegated official or office in power. Once the primary rule is made a secondary rule, the rule of recognition, is enacted. The rule of recognition simply allows private persons and officials the ability to be able to identify the primary rules of obligation. This secondary rule conclusively identifies the primary rules of obligation so as not to be confused as to what are the obligations the primary rule bestows. To have primary rules of obligation and secondary rules of recognition, there needs to be an office or official to be able to adjudicate these rules. To be able to adjudicate these rules there would need to be an additional secondary rule of adjudication. This would allow a judge to be able to determine whether or not the primary rule has been broken. Within the rule of adjudication there would also be rules on the roles of the judge as well as identifying who are to be the judges. With the rule of adjudication there is no question of whether or not a law has been broken and this solidifies the primary rule of obligation. With the ideas of Hart this shows that laws and morality can be separable, but they are not necessarily separated. It is possible to have a separation between low and morality by having some sort of primary rule that would state â€Å"no one rule will introduce the morals or characters of others into the legal system.† It is also possible though for an official delegate to implement a primary rule into the legal system and have it backed by a secondary rule of recognition. Having the secondary rule of recognition would potentially make the morality based primary law a valid legal law. In Hart’s idea morality and law are â€Å"separable†, in the meaning that they are capable of being separated, but they are in no way impossible to be able to be combined in law. Without there being a way to identify morality and making it a subordinate to statute, there can’t be a definite separation with Harts theory. Work Cited 1. Reading in the Philosophy of Law (pg 202-207) 2. www.usconstitution.net (1st Amendment, Article 5 of the Constitution)

Best Practices at Best Buy - Free Essay Example

Sample details Pages: 9 Words: 2569 Downloads: 7 Date added: 2019/10/10 Did you like this example? Best Buy is a company that makes use of the Results-Only Work Environment (ROWE). The company abandoned the traditional models of the working environment and promoted a freer working environment.   The company introduced the Results Only Work Environment that not entail the use of schedules.   Instead, ROWE involves changing the culture of the business rather than altering the plans. Changing the organization’s culture is more difficult to change changing the organization and schedule. Don’t waste time! Our writers will create an original "Best Practices at Best Buy" essay for you Create order The organizations leaders ensure that their employees work from ant where and at any time as long as they produce their results (Armstrong Armstrong, 2011).   During the implementation of the ROWE, the change of culture commenced at the leadership position towards the entire corporation.   The second step during the implementation was communicating the philosophy of ROWE to the training managers and the corporate managers on maintenance and control of ROWE in workplaces.   Their step involved freeing the working units and leaving them to find out a how they will implement the changes.   Each particular team had a different way to maintain flexibility from getting chaotic. After the implementation of ROWE in the company, research was conducted which indicated that there was an increase in the manner productivity. Additionally, it was also observed that increased engagement of employees with their jobs also led to increasing ion sales. Therefore, Brest Buy’s working env ironment is an efficient environment which enables freedom for employee’s hence promoting productivity. The human resource management in the best buy has various roles of retaining, motivating and recruiting.   The human resource management entails, plans, programs, and policies companies adopt with a goal of utilizing employees to the fullest. There are various factors that Best Buy Human resource management should consider as they implement their new working model.   To start with, the organization needs to fathom that work performance is a function of motivation, work organization, capabilities, and employment relation (Boxall, 2015). During the implementation of the ROWE model, the HTRM plays a vital part.   It ensures that the model is affirmed by all stakeholders, the right policies, plan, and programs are in place to enhance effective communication. Stakeholders Stakeholders are vital factors of an organization. They could be creditors, employees, unions, directors, government agencies, or the community.   Before implementing the change in culture, the organization should ensure that every stakeholder agrees to the change process and understand the objectives of the change in the organization. This will enable smooth implementation without any hindrance like lack of finance, non-corporation from employees, and lack of unity.   Various stakeholders will focus on the success of the organization and change in its culture. The director and staff will be more interested in the changes in working environment since they are the immediate stakeholders who also work in the environment (Cronin et al, 2012). Additionally, creditors and debtors would also be interested in the company’s performance since they have invested some money in the firm. Therefore, human resource managers working the organization have to ensure that they put in place more effective policies, plans, and programs that will enable the increase in performance. Environmental factors During the transition from tradition work environments to ROWE working environments, there is a need to fathom the benefits and the limitations of the ROWE model.   The major advantage of this type of working environment is that it enables employees to balance both their personal lives and their career lives. Organizational managers should fathom that flexibility, work life balance and happiness are significant components of a fulfilling and well-balanced career life. Therefore, employers and managers should ensure that their employees balance the work and personal lives to make sure that they are happy, motivated and productive.   The results only working model has been characterized by the employee happiness, flexibility, and productivity.  Ã‚   ROWE has associated with an increase in employees’ motivation as well happiness (Hernandez OConnor, 2010). The focus on results only frees ‘the employee from scheduled working to a freer working environment in which an e mployee works when it’s most convenient for him or her.   This type of working model has led to increases in productivity. This model forces employees and managers carry out positional examinations within organizations and set significant objectives for each team member.   This enhances individual analysis of employees hence being a position to point out any employee who isn’t using his or her time wisely.   This model also ensures that workforce is comprised of motivated, strong and self-driven employees hence ensuring that there are maximum output and performance. The working environment is of great significance in determining the success of an organization.   Best buy has adopted a different working environment that aims at increasing productivity by facilitating a better life and work balance as well as freedom. To achieve their objectives, the organization has to ensure that it maintains a friendly and supportive working environment.   Theoretically, it has been proposed that the improving the working wellbeing and conditions of employees is more likely to improve productivity (Levoy, 2007).   This is due to the minimization of uncertainty, hostility, risks hence increasing motivation and happiness as well as job satisfaction. On the other hand, there are various factors that could affect the working environment of organizations. Best Buy is also an organization which the limiting environmental factors would affect their productivity. A major environmental factor that could affect this organization is goal setting. In goal setting employees should be involved in the setting of significant organizational performance goals. This could be conducted informally or as part of a company’s formal performance management process. Research has shown that employees are a motivated by various factor apart from payment.   Setting objectives is also another source of motivation for employees and organization.   Through setting goals, employees have a vivid perception of hat they intend to achieve hence develop a plan and a way of achieving it.   Research has shown that the setting of more specific goals than generalized goals motivates employees since they understand what is needed of them.   Therefore, as Best Buy assimilates the new working environment and culture, it is of great significance to ensure that they pay keen attention to goal setting. The company should incorporate the employees in making goals and objectives. Additionally, the management of the organization should ensure that they set specific goals for their employees hence making it easier to achieve them as well as enable better preparation and planning on how to achieve them.   Notably, provision of relevant feedback is of great signi ficance in setting goals since it improves efficiency. Through effective goal setting, it is possible to higher working behaviors chances as well as aid in generating commitment to the organizations and the goals. Another environmental factor that could have a significant impact on the Best Buy Company is the performance feedback. Performance feedback is the exchange of information and process of conflict resolution between the supervisor and employee.   It entails both negative and positive feedbacks on the employees’ performance on the performance as well as feedback on how to improve the performance.   Supervisors and managers should feel comfortable while working with an all workplaces factors that affect the employee performance. According to research, performance feedback is the conflict resolution and information exchange process that occurs between supervisor and employee. Provision of feedback to the employees enables them to provide feedback on the requirements. Information exchange could be conducted through formal and informal ways.   Therefore, Best Buy managers should ensure that they provide a feedback frequently and often on their employees performance to ensure th at the employee can assess his or her performance. Failure to provide feedbacks leads to low motivation since the employees do not understand how their work is sand also leads to low performance since employees do not understand on which areas to improve on. Supervisor support is also another major environmental factor that could affect the Best Buy. It is always vital for employees to finish their in successfully.   The supervisor’s major obligation is encouraging or facilitation positive interrelation and increases employees confidence; leading to improvement in employee performance. Respected and skilled personnel’s should be available to employees to aid them in improving their performance in their present duties as well as helping them develop their future roles (Phillips, 2012). Immediate supervisors play the role of employees advocate hence gather and distribute resources required by employees and provides encouragement for any jo that is well executed.   This factor could impact Best Buy Company since the company’s working environment is not scheduled or constrained in the office. Therefore, the management has to ensure that employees who are working at home or in other location are also supervised or hav e a way of interacting with the supervisor. This is also a vital factor that also facilitates better performance from employees. Best Buy Company is making use of ROWE In this model, the organization has to ensure that its employees are fit for the task and exhibit all other significant qualities required.   There is various process through which the management of the organization should use to ensure that the employees recruited are qualified and possess the required traits. The first selection and recruitment methods are through job analysis.   This process entails selecting and developing a method of assessment that enables understanding the requirements of a particular job and shows the required abilities, skills, and knowledge of effectively handle the job. This analysis method could be used to evaluate an individual’s ability to clearly communicate, self-confidence and precisely utilizing, eye and gestures. The ability to show professional appearance and demeanor and the ability to show calmness during stressful tasks. Information in job analysis is utilized as a basis for creating assessments . In particular, assessments are created to show measurements of the most crucial tasks. Some assessments could entail work samples encouraging job candidates hence requiring applicants demonstrate that they can execute the task effectively. Additionally, other assessments techniques measure abilities that needed to execute task effectively like physical abilities, mental abilities or personality traits on the requirements of a job. Assessment methods There are various the Best Buy company can make use of make external or internal selections. Internal selections involve hiring or recruiting individuals within the organization while external selection involves hiring and recruiting individual outside the organization. The first major assessment method could be Cognitive Ability Tests. This kind of assessments take measurements of various mental abilities like mathematical and linguistic ability, reading comprehension as well as reasoning ability (Truss et al, 2012). This test is successful in making predictions of job performance hence significant in selection and recruitment process. The personality test is also another assessment method that assesses traits that are of significance to the performance of a job. The major personality factors frequently assessed include extraversion, agreeableness, emotional stability, conscientiousness as well as openness to experience. Biographical data could also be used as an assessment method w hich entails biodata inventories that question applicants on their personal interest, characteristics as well as the background. The significance of this data is that it enables employers to forecast an applicant’s future performance using the past performance. An integrity test is also major assessment methods that measure an applicant’s experiences and attitudes associated with the applicants trustworthiness, honesty, and dependability. Likewise, the management could make use structured interviews as an assessment method. This kind of interviews are made up of particular question sets designed to assess crucial abilities, and skills that are needed for a particular job. Criteria for evaluating and selecting assessment methods Best Buy comp-any should ensure that theory make use of the most appropriate assessment methods while conducting their recruitment. There are various factors that the organization should consider. They include; validity of the assessment methods. Validity refers to the extent which a method is significant in the prediction of subsequent task performance. Another factor to consider is the adverse impact of a method. This is the degree to which the groups under protection have a lower score during the assessment compared to the majority group. The cost of administration and assessment of an assessment method is also a significant factor to consider. Additionally, the management should also consider the applications response and reaction towards assessment methods. Negative reactions from the majority of the applicants could mean that an assessment method is less effective. Retaining Employees Various techniques and factors will ensure Best Buy Company retain their employees.   Apart from freedom, three major factors will assure employee retaining.   To start with, vivid communication is a major factor that makes employees feel Important and part of the organization.   Managers need to communicate their objective of the organization as well as employee goals and explain the connection between the employee and organization goals.   This can be achieved through the use of tools like The Great Game of business. In this tool, employees are shown how each of their contributions has aided the organization to achieve its objectives (International Conference et al, 2012). Additionally, Best Buy managers should ensure that the mission statement vividly shows the objectives that keep the employees motivated and focused towards the success of the organization. Additionally, the managers should ensure that there is alignment between objectives and values are shown in the missi on statement (Herzberg et al, 2010). This leads to higher commitment levels. However, this occurs only if the employees understand the purpose commonalities. Likewise, listening is also an essential management factor.   While holding communication with employees, managers should ensure that they carefully listen to employees’ comments, questions and make honest responses to them. This enables managers’ point out several problems facing the organization.   Additionally, employees should also be part of the decision-making process.   This indicates that their opinions are taken seriously and count. This creates more respect and trust between employers and employees. Development and Training Most employees seek companies that will enable them to learn as they work. Creation of development opportunities enables managers to understand that they are valued and its one of the most desirable traits of an employer.   Development and training can be conducted in various ways.   It could include [providing mentorship and job training. These forms of development are the easiest to manage and aid in retaining the best people. Mentoring of employees requires managers to develop trust between employers and staff.   Therefore, this requires that managers maintain close relationships with their employees. Moreover, training enhances employees obtain skills that could aid them to improve and advance their careers within the organization. Promotion of development and learning within an organization enables managers to understand how their employees perform in differing situations. Acknowledgment and Praising. This is among the easiest ways through which a manager can engage employees and maintain high production. This involves the use of simple terms like a great job, thanks to you, congratulation, which makes employees feel valued and important. Studies show that 70% of employees allege that absence of recognition is a primary reason they opt to leave their present jobs.  Ã‚   Praising of people after they achieve a goal or do something positive has a longer lasting effect on the staff compared to giving punishments (Vischer, 2012).   When praised, other employees know about and always work harder to get a similar acknowledgment. For managers to find acknowledging and praising easy, they have to ensure that they appreciate employees and do not take them for granted. Therefore, through the above report, Best Buys organization shall ensure that it will retain its employees and also increase their productivity.