Great Inc. is a multi-national manufacturing company which has three lines of business: production, retailing and licensing.
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Question:
Great Inc. is a multi-national manufacturing company which has three lines of business: production, retailing and licensing. Every fiscal year, the firm announces a hurdle rate, a threshold that can be used as discount rate when evaluating all of its investment projects.
a. Do you think this policy (hurdle rate) helps or hurts the company's value? Why?
b. Please use an example to support your answer.
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