We should expect the (weighted)average of all hurdle rates within a firm to be approximately equal to the overall WACC

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The hurdle rate is the minimum rate of return required by a project or investment to be accepted by the company. Each project or division within a company may have a different hurdle rate based on factors such as risk, cost of capital, and potential return. The weighted-average hurdle rate of all projects within a company should be approximately equal to the overall WACC, which represents the cost of capital for the entire company. Therefore, we should expect the weighted average of all hurdle rates within a firm to be approximately equal to the overall WACC.

We Should Expect the (Weighted)average of All Hurdle Rates Within