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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Hurdle Rate

Definition:

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."

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