Question

You are considering investing in Marriott International (NASDAQ: MAR). You will need to make an investment recommendation based on the market and your theoretical value of Marriott International. This question is designed such that your answers in this question should build a company and industry profile of Marriott International and help make your final recommendation. Any assumptions that you rely upon should be clearly stated in your answer.

a) Undertake an industry and company analysis for Marriott International. This question asks you to consider the factors which influence Marriott’s share price.

Answer 1

Factors which can influence Share price of Marriotts

1) Factors related to Company- a change in compans operation can cause volatity in price of shares ie, increase/ Decrease in sales, increase/ decrease in Production cost, Changing line of production, increase/decrease in debt repayment ie Debt equity ratio of company,

Negative factors such as change in top management of company, High employee turnover, high manufacturing cost etc.

2) Monetary policy of Funding agency- increase/ decrease in repo rate, reverse repo rate and interest rate can cause volatility in price of share

3) Forex Exposure: increse/decrease in forex rate affects Export and import of the firm causing cash inflow and outflow of the company and hence affects the price of the shares

4) Gold Prices and Bonds: Generally Gold is considered as safe investment. Bond gives assured return to the investor and less risky than Stock. Hence it also affects price of shares

5) Government Policy and Political situation: A change in Policy of Government can leads to increase / decrease in firm's revenue. Government announcement/ de-announcement greatly affects the revenue of the company. Also new hope from new government during election can cause value of shares

6) Natural Disaster: It affects the firm badly because it is an uncontrollable activities