Question 10 Problem 10: Assuming that the long-term USD risk-free rate is 3%, the global market risk premium is 5%. Firm Z is valuing a project in Thailand and finds that the operating beta of its Thai-based proxy firm is 2.43. The political exposure of the Thai project is assumed to be average and that the political risk premium for Thailand is 6%. What is Firm Z's hurdle rate for the Thai project based on the Damodaran Model?
Question 10 Problem 10: Assuming that the long-term USD risk-free rate is 3%, the global market risk premium is 5%. Firm Z is valuing a project in Thailand and finds that the operating beta of its Thai-based proxy firm is 2.43. The political exposure of the Thai project is assumed to be average and that the political risk premium for Thailand is 6%. What is Firm Z's hurdle rate for the Thai project based on the Damodaran Model?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Question 10
Problem 10: Assuming that the long-term USD risk-free rate is 3%, the global market risk premium is 5%. Firm Z is valuing
a project in Thailand and finds that the operating beta of its Thai-based proxy firm is 2.43. The political exposure of the
Thai project is assumed to be average and that the political risk premium for Thailand is 6%. What is Firm Z's hurdle rate
for the Thai project based on the Damodaran Model?
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