Hurdle Rate Explained: Formula, Calculation & Investment Guide

Aug 21, 2026
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Hurdle Rate: Definition, Formula, Calculation and How It Helps Investors Make Better Decisions

r accepting an investment or project.

The basic relationship can be summarized as:

Hurdle Rate = Cost of Capital + Risk Premium

For businesses, it can help evaluate capital projects. For investors, it can provide a framework for deciding whether expected returns adequately compensate for risk.

For Nepal's stock market investors, hurdle-rate thinking can be combined with fundamental analysis, technical analysis, valuation, risk management and NEPSE market research to build a more disciplined investment process.

If you want to improve your understanding of the Nepalese stock market, explore Share Market Training Nepal and NEPSE Analysis Training through Sarbaguna.com.

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