The necessary rate of return (hurdle rate) is the minimum return on investment that an investor should anticipate. The necessary rate is essentially the lowest acceptable remuneration for the investment's degree of risk. In corporate finance and stock valuation, the necessary rate of return is a crucial topic. It is widely employed as a discount rate in stock valuation to assess the present value of cash flows. The necessary rate is a frequent criterion for separating viable from unworkable investment options. The basic rule is that an investment should be rejected if its return is less than the needed rate.