Enter the cost of capital (%) and the risk premium (%) into the Hurdle Rate Calculator. The calculator will evaluate the Hurdle Rate. 

Hurdle Rate Calculator

Basic Hurdle Rate
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Enter any 2 values to calculate the missing variable

Hurdle Rate Formula

The following two example problems outline the steps and information needed to calculate the Hurdle Rate.

HUR = CC + RP
  • Where HUR is the Hurdle Rate (%)
  • CC is the cost of capital (%) 
  • RP is the risk premium (%) 

To calculate a hurdle rate, sum the cost of capital by the risk premium.

How to Calculate Hurdle Rate?

The following example problems outline how to calculate Hurdle Rate.

Example Problem #1:

  1. First, determine the cost of capital (%).
    • The cost of capital (%) is given as: 3.
  2. Next, determine the risk premium (%).
    • The risk premium (%) is provided as: 5.
  3. Finally, calculate the Hurdle Rate using the equation above: 

HUR = CC + RP

The values provided above are inserted into the equation below and computed.

HUR = 3 + 5 = 8.00 (%)

Example Problem #2: 

For this problem, the variables required are provided below:

cost of capital (%) = 5

risk premium (%) = 6

Test your knowledge using the equation and check your answer with the calculator..

HUR = CC + RP = ?