Target Return

Dictionary Says

Definition of 'Target Return'

A pricing model that prices a business based on what an investor would want to make from any capital invested in the company. Target return is calculated as the money invested in a venture plus the profit that the investor wants to see in return, adjusted for the time value of money. As a return on investment method, target return pricing requires an investor to work backwards to reach a current price.
Investopedia Says

Investopedia explains 'Target Return'

One of the major difficulties in using this pricing method is that an investor must pick both a return that can be reasonably attained, as well as a time period in which the target return can be reached. Picking a high return and a short time period means that the venture has to be much more profitable in the short-run than if the investor expected a lower return over the same period, or the same return over a longer period.

Sign Up For Term of the Day!

Try Our Stock Simulator!

Test your trading skills!

Related Definitions

  1. Return On Investment - ROI

    A performance ...
  2. Investment

    An asset or item ...
  3. Venture Capital

    Money provided ...
  4. Return

    The gain or loss ...
  5. Business Valuation

    The process of ...
  6. Smart Money

    Cash invested or ...
  7. Risk

    The chance that ...
  8. Fund Of Funds

    A mutual fund ...
  9. Risk Capital

    Investment funds ...
  10. Event Risk

    1. The risk due ...

Articles Of Interest

  1. How Venture Capitalists Make Investment Choices

    In order to increase your odds for receiving funding, here are some criteria considered by venture capitalists.
  2. When Your Business Needs Money: Angel Investors

    If you have a promising business that needs a boost, you may be able to put your faith in these wealthy investors.
  3. The Impact Of Recession On Businesses

    Find out how this economic cycle affects both small and big business.
  4. How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  5. Getting To Know Business Models

    Learning how to assess business models helps investors identify companies that are the best investments.
  6. Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  7. Is Buying A Franchise Wise?

    If you like being your own boss, this is not the job for you.
  8. Why Successful Business Owners Sell Out

    Learn the motives that drive companies into the arms of an acquirer.
  9. Prepare To Sell Your Business

    Follow these tips to ensure you get the most out of your hard work.
  10. Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.

comments powered by Disqus
Recommended
Loading, please wait...
Trading Center