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| Author: | Hergert, M. |
| Title: | Strategic resource allocation using divisional hurdle rates. |
| Journal: | Planning Review
1987 : JAN-FEB, VOL. 15:1, p. 28-32 |
| Index terms: | STRATEGIC PLANNING CAPITAL INVESTMENT CAPITAL BUDGETING CAPITAL ASSET PRICING DIVERSIFICATION |
| Language: | eng |
| Abstract: | Setting business unit hurdle rates is very complicated, especially in multi-business- business firms, where different hurdle rates must be used when allocating capital. The capital Asset Pricing Model /CAPM/ provides a framework. Two methodologies can be used for estimating divisional hurdle rates: Peer group analysis, and cross-sectional risk assessment. |
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