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Entrepreneurship Suffers When Well-Paid Jobs Are Plentiful

The Horizons Tracker

They believe that their findings add additional nuance to the current narrative that suggests that the decline in entrepreneurship is largely a consequence of higher startup costs, labor constraints, or even the aging population. Opportunity costs. of physicians operating as independent owners in 2019, versus 48.5%

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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?" They believed managers needed a better way to come up with a number to represent their cost of capital, and that's what they were presenting. That paragraph isn't my own writing. by James J. McNulty, Tony D.

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

Unless your company’s return on capital exceeds its cost of capital, no amount of revenue growth can create value. For the many firms whose cost of capital and return on capital are roughly equal, in fact, the only path to value creation is to increase return on capital.

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The Real Reasons Companies Are So Focused on the Short Term

Harvard Business Review

Quarterly profits have only increased 5% since 2012 , but investors’ valuations of those profits (as measured by earnings per share) has increased 59% over the same period. Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies.