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Still Many Ways to Skin a Capital Cost

Harvard Business Review

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. But that article was written a decade ago, and still the CAPM rules — and as for how to come up with the crucial inputs to it, well, practice remains all over the map.

CAPM 14
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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. Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital. the notion that debt financing can be “cheap” at certain times).

CAPM 8
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Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

This is the key finding of the Current Trends in Estimating and Applying the Cost of Capital research released this week by the Association for Financial Professionals, a trade group of 16,000 corporate treasury and finance practitioners. Download this pdf for an executive summary, or login here for the full report.)