Explain the process by which Julie must have determined the hurdle rate for the entire company. The
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Explain the process by which Julie must have determined the hurdle rate for the entire company. The corporate tax rate was 40%, the yield on outstanding bonds was 11%, treasury bills were yielding 4% and the market risk premium was estimated at 10%. The company currently had 30% of its capital in the form of debt and the remaining in the form of common stock.
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