Family Business Director

Corporate Finance & Planning Insights for Multi-Generational Family Businesses

Category

FAQ


Capital Allocation

Determining the Right Hurdle Rate

How Good is Good Enough?

If family business directors are going to make good capital allocation decisions, they need to know what the right hurdle rate is.  If the hurdle rate is set too low, the family may experience weak future returns.  Setting the hurdle rate too high, however, introduces the risk that the family business will pass on attractive investment opportunities.  In this post, we consider how the hurdle rate relates to the weighted average cost of capital.

Consulting Services

Family Business Advisory Services

Mercer Capital provides financial education services and other strategic financial consulting to family businesses