Required return

Required return

The minimum expected return you would need in order to purchase an asset, that is, to make the investment.

Required Rate of Return

In securities, the minimum acceptable rate of return at a given level of risk. Different investors have different reasons for choosing their required returns. Normally, it is determined by a person's or institution's cost of capital. For example, an investor may also carry a debt with a high interest rate; if an investment does not meet a required rate of return, it would make more sense for the investor to pay down his/her debt. The required return is also related to the amount of risk an investor is willing to accept. One with a portfolio consisting largely of bonds will generally have a lower required return than one whose portfolio contains mainly stocks. See also: Markowitz Portfolio Theory.
References in periodicals archive ?
Projects reach flip dates when tax equity amounts achieve the required return levels.
This means that when the required return increases, the PSE index falls in 48 percent of the time, and vice versa.
Based on future projections and having set a clear strategy for each location, we will review up to 10 stores for closure over five years, should these stores not meet our required return thresholds.
The less attractive the property is, the higher will the required return be.
It is the path of this increased required return to equity that we argue is inadequately addressed by textbooks and provides the focus of this paper.
The investor required return equals the portfolio's 5% coupon, which is highly unlikely and inconsistent with the assertion that the TruP CDO portfolio had little or no value as of 2010.
25 percent divided by 6 percent) to restore the 6 percent required return.
If you failed to file a required return, the good faith exception does not apply and there is generally no limit on the time the states can take to track you down.
2 The conventional stance further argues that as more leverage is applied, the investor starts greater disciplining of the firm's required return on equity until in due course it compensates the use of cheaper debt financing.
Based on priority of security claim and option pricing theory, required return on a firm's equity is always higher than the required return on its own debt.
These plans will usually run for five years so you will have five anniversaries to achieve the required return.
While 74% of respondents confirmed that their companies are "most of the time" getting the required return on IT spent in the form of increased efficiencies, customer satisfaction, etc.

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