The independent home of the case method - and a charity. Make an impact and  donate

Product details

Product details
By continuing to use our site you consent to the use of cookies as described in our privacy policy unless you have disabled them.
You can change your cookie settings at any time but parts of our site will not function correctly without them.

Abstract

This is part of a case series. Hospitality Corporation is a multidivisional company of boutique hotels and specialty coffee shops located in the US south coast. For the past 10 years, the company has achieved considerable growth both organically and through acquisitions. More recently, increased competition and volatile business conditions have impacted the company's profitability and stock price. The firm is revisiting its value creation drivers, and an important component of this new effort is to adequately determine and effectively manage its cost of capital. Yasmin Bishara, as Hospitality's Executive Assistant to the CFO, has been asked to present an analysis of the firm's cost of capital and how it should be managed to achieve enhanced capital budgeting and resource allocation. In Part A of the case, Yasmin calculated the overall company WACC as well as the hurdle rates for each of its two divisions. She now contemplates how climate change risk can be incorporated into her capital budgeting decisions.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Geographical setting

Region:
Americas
Country:
United States

Featured company

Hospitality Corporation
Type:
Public company

Featured protagonist

  • Yasmin Bishara (female), Executive Assistant to the CFO

About

Abstract

This is part of a case series. Hospitality Corporation is a multidivisional company of boutique hotels and specialty coffee shops located in the US south coast. For the past 10 years, the company has achieved considerable growth both organically and through acquisitions. More recently, increased competition and volatile business conditions have impacted the company's profitability and stock price. The firm is revisiting its value creation drivers, and an important component of this new effort is to adequately determine and effectively manage its cost of capital. Yasmin Bishara, as Hospitality's Executive Assistant to the CFO, has been asked to present an analysis of the firm's cost of capital and how it should be managed to achieve enhanced capital budgeting and resource allocation. In Part A of the case, Yasmin calculated the overall company WACC as well as the hurdle rates for each of its two divisions. She now contemplates how climate change risk can be incorporated into her capital budgeting decisions.

Teaching and learning

This item is suitable for undergraduate, postgraduate and executive education courses.

Settings

Geographical setting

Region:
Americas
Country:
United States

Featured company

Hospitality Corporation
Type:
Public company

Featured protagonist

  • Yasmin Bishara (female), Executive Assistant to the CFO

Related