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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Hurdle Rate


In the Olympic finals, it will be fast. On Wall Street, the hurdle rate refers to a minimum per cent return on investment that an opportunity must surpass in order to get funded. That is, "we think this building will cost $100 million all in and in 7 years we'll sell it for $200 million. Our cost of capital is 5% and our hurdle rate is 7%; in this case the investment would return 10% so it passes our hurdle rate. Let's do it, baby."