Harvard Business Review
JUNE 18, 2015
PE firms typically buy controlling shares of private or public firms, often funded by debt, with the hope of later taking them public or selling them to another company in order to turn a profit. But how do PE firms decide which companies to buy? We classify private equity as buyout or growth equity investments in mature companies.
Strategy Driven
FEBRUARY 21, 2020
Pre-money valuation is a company’s liquidity before it earns the cash from an investment round. With the contribution of cash to the balance sheet of a business through the shareholder value, the post-money value becomes stronger due to the additional cash earned. The price of a single share will $25.
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Harvard Business Review
JANUARY 24, 2014
The core argument to compel institutional investors to change how they influence companies and where they invest their money is simple: as the world pivots away from carbon-based energy to avoid devastating climate change, fossil fuel assets, like coal plants or off-shore oil rigs, will be “stranded” — a wonky term for “worthless.”
Harvard Business Review
MARCH 29, 2018
Each of the new companies offers the hope of transforming the performance of the U.S. But they should also allow the acquisition of software technology to be determined by performance considerations and discounted-cash-flow calculations, not whether the acquisition fits within predetermined capital and operating budgets.
Harvard Business Review
MARCH 10, 2011
When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. How can that be when the same information about the stock's underlying company and markets are available to both?
Harvard Business Review
SEPTEMBER 27, 2013
In 2007, Clayton Christensen co-founded Rose Park Advisors, a hedge fund devoted to investing in disruptive companies. Investors’ core valuation methods ( comparables and discounted cash-flow analysis) both extrapolate past performance into the future — but they fail to predict when the future will be radically different from the past.
Harvard Business Review
MARCH 10, 2011
Little wonder, then, that when we asked if they were in the habit of communicating their weighted average cost of capital estimates company-wide, only 15 percent said they were. The vast majority of companies do practice some form of cost of capital estimations. Source: Association for Financial Professonals' Cost of Capital Survey.
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