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hurdle rate

British  

noun

  1. finance the rate of return that a proposed project must provide if it is to be worth considering: usually calculated as the cost of the capital involved adjusted by a risk factor

"Collins English Dictionary — Complete & Unabridged" 2012 Digital Edition © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009, 2012

Example Sentences

Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.

At the end of the trust’s term, any appreciation that is above a hurdle rate set by the Internal Revenue Service goes to heirs free of gift and estate taxes.

From Barron's • May 16, 2026

If the value doesn’t rise above the hurdle rate, the assets return to the grantor’s estate and the trust is dissolved.

From Barron's • May 16, 2026

A fund might fail to clear the minimum annualized return threshold, known as a hurdle rate.

From The Wall Street Journal • Nov. 20, 2025

With a higher weighted-average cost of capital, the hurdle rate for new investments increases and fewer investments are chosen with today's net present value, discounted ROI models.

From New York Times • Feb. 24, 2017

“Capital ratios already have extremely thick buffers above this required hurdle rate and they simply don’t have a lot of exposure to volatility to sovereign debt prices.”

From BusinessWeek • Oct. 21, 2011

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