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Why Those Guys Won the Economics Nobels

Harvard Business Review

APRIL 2, 2014

Campbell’s work has also made liberal use of the analytic tools developed by Hansen. Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. And the theory that was available then was CAPM. Instead, what you need to do is scenario analysis.

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

Harvard Business Review

MARCH 10, 2011

Only 46 percent use the perpetuity growth model, while 27 percent develop an explicit cash flow forecast for the entire life of a project. Fully 72 percent develop multiple cash flow scenarios representing the expected outcome as well as best- and worst-case outcomes, which are then discounted.

Cost of Capital 13
Cost of Capital CAPM Cost Discounted Cash Flow 13
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