Case | HBS Case Collection | March 1998 (Revised March 2001)

Concordia Electronic Systems Test

by Thomas R. Piper

Abstract

The management of an electronics company must decide whether to use a single hurdle rate for all projects or to move to a system of different hurdle rates for each of its two divisions. The divisions differ substantially in terms of risk and seem to have substantially different costs of capital.

Keywords: Business Model; Risk and Uncertainty; Cost of Capital; Valuation; Business Divisions; Electronics Industry;

Citation:

Piper, Thomas R. "Concordia Electronic Systems Test." Harvard Business School Case 298-115, March 1998. (Revised March 2001.)