hurdle rate
Definition
The required rate of return in a discounted cash flow analysis, above which an investment makes sense and below which it does not. Often, this is based on the firm's cost of capital or weighted average cost of capital, plus or minus a risk premium to reflect the project's specific risk characteristics. also called required rate of return.
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Related Terms
net present value, expected return, cost of capital, cutoff point
'hurdle rate
' appears in the definitions of these terms on BusinessDictionary.com
discounted cash-flow (DCF)
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