Remove 2012 Remove Cost of Capital Remove Finance Remove Leadership
article thumbnail

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.