Remove Cost of Capital Remove Finance Remove Industry Remove Management
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Adapt Your Strategy to Higher Interest Rates

Harvard Business Review

While many executives and investors were thrown by last year’s interest rate increases, the cost of capital needn’t be a threat. Companies that integrate the cost of capital into their strategy and planning reap real benefits. When something is cheap, people waste it.

EPS 23
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What’s Driving Superstar Companies, Industries, and Cities

Harvard Business Review

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

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Still Many Ways to Skin a Capital Cost

Harvard Business Review

It's the opening paragraph of a Harvard Business Review article called "What's Your Real Cost of Capital?" The motivation behind it, as with many, many articles published over HBR's nearly 90-year history, was to take an effective practice developed in one corner of industry and spread it to managers everywhere.

CAPM 14
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Should Companies Retain "Strategic" Cash?

Harvard Business Review

This raises the question of whether retaining strategic cash makes economic sense and should be viewed as a legitimate corporate finance tool in today's environment. Strategic cash also can be used to finance long-term reinvestment programs in the business—which is especially valuable to companies in capital-intensive industries (e.g.,

Company 14
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Divestment Alone Won’t Beat Climate Change

Harvard Business Review

Proponents argue that divestment is a symbolic statement that can discourage fossil fuel consumption by stigmatizing the industry. Divestment can theoretically address this market failure by limiting investment by the fossil fuel industry by depressing company valuations and thereby increasing the cost of capital.

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Divestment Alone Won’t Beat Climate Change

Harvard Business Review

Proponents argue that divestment is a symbolic statement that can discourage fossil fuel consumption by stigmatizing the industry. Divestment can theoretically address this market failure by limiting investment by the fossil fuel industry by depressing company valuations and thereby increasing the cost of capital.

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

.” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

CEO 8