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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 13
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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?" knew that firms were making heavy use of the capital asset pricing model (CAPM) to size up growth opportunities, but that the model was only as good as its inputs. That paragraph isn't my own writing. by James J.

CAPM 13
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Divestment Alone Won’t Beat Climate Change

Harvard Business Review

The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market. For many companies, most of the capital expenditures are financed from internal cash flows and bank financing. Finance Sustainability'

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Divestment Alone Won’t Beat Climate Change

Harvard Business Review

The key argument for fossil fuel divestment is that the cost of carbon dioxide emissions and other pollutants are not being accurately priced by the market. For many companies, most of the capital expenditures are financed from internal cash flows and bank financing. Finance Sustainability'

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders. In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches.

CAPM 8
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Providing Earnings Guidance? Think Again

Harvard Business Review

The arguments center on the value of establishing increased transparency with investors, and include: Higher Stock Price: The advocates for guidance argue that it can result in a higher stock price. First, let's review the case for guidance. Otherwise, they may be shackled by Fair Disclosure (Reg. FD) constraints.

CFO 11
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Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

Many are deeply uncertain about which initiatives they should fund — and one root of this indecision is a general lack of confidence in the cost of capital projections they are using to make the call. We find that 55 percent of respondents are convinced their cost of capital estimates are off by more than 50 basis points.