Sentences with phrase «investment hurdle rate»

The rationale for a predetermined investment hurdle rate is that when compared to the essentially risk - free interest rate of 10 - 30 year US treasury bonds, what return should I get from non-US treasury bonds in order to justify and compensate for the risk I'm taking?

Absolute valuation means you value if something is over-valued based on a predetermined investment hurdle rate.

Not exact matches

Stephen Poloz used a speech on September 20 in Quebec City to educate a group of economists about the «hurdle rate» — the minimum return on an investment companies require before they agree to part with their money.

An investment decision should pass two hurdles — it must be viable in the inter-temporal sense discussed above, based on real interest rates.

The inflation rate might therefore be considered the «hurdle rate» for an investment strategy — the minimum return required to keep a portfolio's purchasing power intact.

However, in my conversations with Canadian firms I have picked up on another possible investment impediment — hurdle rates for new investments do not seem to have adjusted to the new reality.

I have had some business leaders tell me that they have been surprised to see, for example, companies in Asia pursuing investments with implicit returns of around 3 to 4 per cent, well below most companies» hurdle rates.

There are financial metrics (Return on Investment, Hurdle Rate, etc.) for new product development that emphasize immediate returns.

Generally, you calculate the hurdle rate by adding together the risk - free interest rate, a measure of inflation expectations over the life of the project and a premium to compensate for the investment's risk.

Second, a high natural rate of interest implies a large required rate of return and a more stringent hurdle for potential investments to surmount.

Your goal: Pick investments that beat a hurdle rate of return, known as the «assumed interest rate,» which might be 3 % or 4 % a year.

But a high AIR has a drawback: For your income to grow, the investments you select within the variable annuity need to generate annual returns that outpace this hurdle rate.

The higher those costs, the harder it will be for your investments to earn decent performance and thereby outpace the hurdle rate of return.

If we think the internals for a company and its securities are good enough to meet our hurdle rates — a pre-tax return of 30 % or better without meaningful investment risk; we ignore market risk completely.

PEG ratios work for core and growth investors, but the PEG ratio hurdles needed for investment are lower than most investors think, so long as the expected rate of return (discount rate) is high.

If opportunity cost does not determine your hurdle rate for an investment, then what exactly does?

AAII Stock Ideas The Muhlenkamp Stock Screen: High ROEs at a Reasonable Price Muhlenkamp uses a bottom - up approach to selecting stocks, but adjusts his benchmarks based upon the broad economic environment, using prevailing inflation and interest rates to help establish his investment hurdles.

Muhlenkamp uses prevailing inflation and interest rates to help establish his investment hurdles.

Though the shares have returned more than my 25 % hurdle rate I think I will have to reassess the investment hypothesis at my one year holding anniversary.

So the more complete way of seeing whether the stock market is over-valued or not is to determine how much excess return (or minimum hurdle rate) is appropriate to compensate for the risks and costs in investing in non-risk free investments such as stocks?

With lower cash flow, you have a higher hurdle to achieve a good rate of return on your investment.