0. Introduction and Diagnosis This case is an example of expropriation of the bondholders of a firm. On October 5, 1992 Marriott announced that it would split the company into two separate firms: a hotel management company and a real estate company. They also arranged for the debt of the firm to be allocated almost completely to the real estate company. This was a response, in part, to the historically high levels of debt and commensurately low credit ratings of the company. However, 81% of the cash flows were generated by the hotel management company. Since the risk of the existing debt was greatly increased, the value of the debt was greatly decreased. This reduction of value for the debt holders resulted in an increase in the value of Marriott equity, a wealth transfer from debt holders to equity holders should occur. Marriott spin-off the firm allocated its debt to its poorer performing assets. Table 2, illustrates that the subsidiaries have leverage greater than predicted when they have higher ROA. Since the spin-off unit is much smaller than the parent. The parent firm b......

Word Count: 1508
Page Count: 6 (250 words a page / double spaced)

View This Essay Now $19.99 (or $12.99 for membership)

What is Your Time Worth? Get INSTANT UNLIMITED ACCESS to this paper
and 15,000 other essays and term papers!

Search for other marriot essays, term papers and book reports.

Other Free Essays, Term Papers and Book Reports:

TV censorship free book report
Sundiata free essay paper
The Origins of Death: A comparison / Contrast free term paper
Vietnam and its effects on Iraq free essay paper
Nuclear Energy free essay paper
Macbeth free term paper
Drinking Age is Just a Number free term paper
HIV and AIDS in Canada free book report
Contrasting the Two Missionaries in 'Things Fall Apart' by Chinua Achebe free book report
Common: The Rare Romantic Rapper free essay paper
Jack Johnson and his relationship with Lucille Cameron free term paper
Family Health Nursing free term paper
Fast Food Restaurants free term paper
Watergate free term paper
The Fountainhead free essay paper
Obsessive Compulsive Disorder free term paper
abe lincoln free book report
Third World countries free book report
Analysis of Lysistrata free book report
Hitting the slopes free book report

We have the best book reports, essays and term papers on marriot. For the cost of a pizza and some beer let us help you make your job of writing your paper easier. It's that simple.

Dear Free Essays:

Thanks for helping me with my term paper!
With so many essays and term papers on your service, I got a few ideas from mixing and matching and managed to write a great paper in 1/10 the time. My teacher thought so too because I got an A grade. Thank you so much!

Julia B.
Denver, Colorado

I'm very pleased with the quality of your term papers and essays. For all the time and worrying your service saved me from, it was well worth the $12.99.

Brandon W.
Columbus, Ohio

I totally waited to the last minute to work on my term paper and really started to freak. But your site totally came to my rescue and helped me out of a bind. I scored an 94 and was very pleased. Thank you!

Greg F.
UC San Diego

PRIVACY | TERMS & CONDITIONS | MEMBER LOGIN | CUSTOMER SUPPORT