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 Cost CAPM Discounted Cash Flow 13

Harvard Business Review

MARCH 10, 2011

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. The same is true for the CAPM. ". by James J.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

JUNE 18, 2015

Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital. Another indication that PE investors are skeptical of CAPM-based methods for valuing companies is the fact that they rely on exit multiples as a shorthand for evaluating their investments. (If

Discounted Cash Flow 8

Discounted Cash Flow CAPM Company Rate of Return 8