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

Harvard Business Review

In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches. the notion that debt financing can be “cheap” at certain times). Do PE investors do what the academy says are “best practices?” What PE firms do after they invest.

CAPM 8
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The Largest Risk (and Opportunity) Investors Are Ignoring

Harvard Business Review

As Nick Robins from the bank HSBC described to the audience, in a scenario of global peak fossil fuel use by 2020 “implies a 44% reduction in discounted cash flow value of fossil fuel companies” — or in simpler terms, a decline in share price of 40 to 60 percent. Economy Finance Sustainability' coal market.

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What is the importance of pre-money valuation For Your Business?

Strategy Driven

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. A pre money valuation is crucial for financing as eventually, it can decide if an entrepreneur has the starry, strong and bad, or sometimes has no way out.

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Still Many Ways to Skin a Capital Cost

Harvard Business Review

Estimating the rate at which to discount the cash flows — the cost of equity capital — is an integral part of the exercise, and the choice of rate has a significant effect on estimates of a project's or a company's value. One of the architects of the survey, Mark Scott, is also one of its beneficiaries.

CAPM 14
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Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

This notion, that risk is a desirable feature, can seem like sacrilege to anyone who’s taken an introductory finance course. One CFO commented that they now avoid inviting company accountants to their strategy meetings, while another said that CPA certification is considered a disqualification for a top finance position.

Report 8
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What Markets Do and Don’t Get About Innovation

Harvard Business Review

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. Disruptive innovation Finance' New-market disruption is more complex.

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Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

Instead, the finance office can allow the department to keep some of the savings it created, in excess of the original acquisition cost, in future year budgets. This is an imperfect option though since it still does not give a department the incentive to achieve savings in future years.