hurdle rate

Another criterion will be the high hurdle rate for investment.

That hurdle rate is at the low end of the 7 to 9 percent range common for private equity and hedge funds.

The hurdle rate of a 9 percent return on equity is relatively high for such compensation packages, she said.

The hurdle rate is the Minimum acceptable rate of return on an investment.

A "hard" hurdle is calculated only on returns above the hurdle rate.

Under the terms of the plan, the company's compensation committee of the board has until year-end to set the hurdle rate.

The customary hurdle rate in private equity is 7-8% per annum.

High real interest rates sharply cut the number of investment projects by raising the "hurdle rate" over which qualified projects had to jump.

Other businesses that are not essential will be cut, unless they can get up to what Mr. Olson calls the "corporate hurdle rate."

Thus, identifying the proper discount rate - often termed, the project "hurdle rate" - is critical to making an appropriate decision.

Performance measurement: Risk is usually represented in form of risk adjusted discount rates or hurdle rates.

It is susceptible to manipulation by managers with a short term focus, or by manipulating the hurdle rate used to evaluate divisions.

The hurdle rate is frequently used as synonym of cutoff rate, benchmark and cost of capital.

A "soft" hurdle means the performance fee is calculated on all the fund's returns if the hurdle rate is cleared.

In most realistic cases, all independent projects that have an IRR higher than the hurdle rate should be accepted.

All shares are subject to a 5% hurdle rate - there is no incentive fee charged on the first 5% of returns.

"Travelers Property Casualty didn't meet our hurdle rates," Mr. Weill said.

The hurdle rate is usually determined by evaluating existing opportunities in operations expansion, rate of return for investments, and other factors deemed relevant by management.

Usually no incentive fees are charged if the CTA does not generate a profit exceeding a hurdle rate or high water mark.

CFROI is compared to a hurdle rate to determine if investment/product is performing adequately.

The CFROI must exceed the hurdle rate to satisfy both the debt financing and the investors expected return.

A common method for evaluating a hurdle rate is to apply the discounted cash flow method to the project, which is used in net present value models.

The hurdle rate should reflect the riskiness of the investment, typically measured by volatility of cash flows, and must take into account the project-relevant financing mix.

The fact that there exist clear pre-set 'hurdle rates' to trigger a re-weighting, minimises the number of re-weightings and thus reduces the transactions costs for replication.

Most companies use a 12% hurdle rate, which is based on the fact that the S&P 500 typically yields returns somewhere between 8% and 11% (annualized).