hurdle rate

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

Example Sentences

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

Read more on The Wall Street Journal

“The hurdle rate for our investments has gotten higher. And that means that some initiatives what that requires substantial capital will be slowed. We have to make sure our unit economics work before we go big.”

Read more on The Verge

“Investors’ expectations of the stock market now have risen and it just means the hurdle rate is higher for positive surprises,” Lerner said.

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The Bank of England sets each bank its own hurdle rate.

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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.

Read more on New York Times