Remove Hurdle Rate Remove Investments Remove Leverage Remove Profit and Loss
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Data Update 4 for 2021: The Hurdle Rate Question!

Musings on Markets

What is a hurdle rate for a business? There are multiple definitions that you will see offered, from it being the cost of raising capital for that business to an opportunity cost , i.e., a return that you can make investing elsewhere, to a required return for investors in that business. What is a hurdle rate?

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Transcript: Tim Buckley, Vanguard’s CEO

Barry Ritholtz

We have lowered the cost of investing, and we have improved the quality of those funds. It forced us to make some tough choices in that time in some big investments, whether we were building out our advice capabilities and building virtual teams to do it, or you know, tough choices in our retirement business.

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Data Update 7 for 2023: Dividends, Buybacks and Cash Flows

Musings on Markets

The dividend principle, which is the focus of this post is built on a very simple principle, which is that if a company is unable to find investments that make returns that meet its hurdle rate thresholds, it should return cash back to the owners in that business.