Required rate of return
Required rate of return, rs, is the minimum acceptable rate of return, considering both its risk and the returns available on other investments.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Required rate of return, rs. The minimum acceptable rate of return, considering both its risk and the returns available on other investments.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Required rate of return, rs. The minimum rate of return on a common stock that a stockholder considers acceptable.
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Required rate of return (RRR). The minimum acceptable annual rate of return on an investment. Also called the discount rate, hurdle rate, cost of capital, or opportunity cost of capital.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
