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?" 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.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

NOVEMBER 25, 2013

It doesn’t need to be complicated; in one company, a marketing department saved 20 percent after simply benchmarking the money they were spending on external agencies. And at another — a consumer packaged goods company — a series of strong brands had evolved in separate silos.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

OCTOBER 10, 2017

While the execution of a conventional strategy lends itself to linear progress and clear benchmarks, innovation often proceeds by S-curves , moving at a slow crawl until it explodes at an exponential rate. For any business to succeed over the long term, it must earn a return that exceeds its cost of capital.

Innovation 8

Innovation P&L ROI Long-term 8

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 CAPM Cost Discounted Cash Flow 13

Harvard Business Review

JUNE 18, 2015

Rather, they rely on internal rates of return and multiples of invested capital. Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital. Our results on capital structure are more consistent with academic theory and teaching.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

JUNE 22, 2015

” The other forms of ROI often require a more complex understanding of financial concepts such as the firm’s cost of capital or the time value of money. . “I like breakeven analysis because it is easy to understand and it’s often the simplest way to think about return on investment.”

Payback Period 8

Payback Period Fixed Costs Analysis Price 8