Reinvestment Rate

Home » CMA Glossary Term » Corporate Finance » Reinvestment Rate

Reinvestment Rate refers to the percentage of returns or earnings from an investment that is reinvested back into the same or similar investment vehicles, rather than being distributed as income. It is a crucial metric in assessing the growth potential of investments and is often used in capital budgeting and financial analysis. Understanding what is reinvestment rate helps in evaluating the compounding effect on investment returns over time.

CMA Exam Academy 16-Week Accelerator Program