Definition for : Required rate of return

Required Rate of return is the Rate of return the providers of funds can reasonably ask for given the level of risk of the project, company, venture, etc, they invest in. According to the CAPM (see this term), the required Rate of return is equal to: Risk-free rate + ? (Beta) x Market risk premium.

(See Chapter 19 The required rate of return of the Vernimmen)

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