Harvard Business Review

MARCH 10, 2011

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.

Cost of Capital 13

Cost of Capital CAPM Cost Discounted Cash Flow 13

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. Soon, it really doesn’t matter what your strategic planning documents say. It may seem that sales has little impact on the fourth value-creation lever, the firm’s cost of capital.

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10

Strategy Driven

SEPTEMBER 9, 2011

The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. Net present value [NPV] is a case in point. Discovery-Driven Growth : A Breakthrough Process to Reduce Risk and Seize Opportunity by Rita McGrath.

Innovation 50

Innovation NPV Business Model Constraint 50