What is firm xs hurdle rate for a us project based on gcapm


Problem

Firm X has an equity beta of 1.80 based on the GCAPM model. Firm X has a market capitalization of USD 100 million and net debt of USD 15 million. The long-term USD risk-free rate is 3%, the global market risk premium is 5%. What is Firm X's hurdle rate for a U.S. project based on GCAPM?

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