Harvard Business Review

OCTOBER 15, 2013

At many companies the total cash investment in acquisitions, R&D, and fixed assets has not earned back its cost of capital after adjusting for the time lag in realizing incremental benefits. It reflected the reality that a lot of GE’s growth will be coming from the developing world, and the leaders have to be there.

P&L 8

P&L Fixed Assets Charan Delegation 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

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. The capital asset pricing model was supposed to allow companies to calculate their cost of capital in a consistent way.

CAPM 8

CAPM Discount Price Finance 8

Strategy Driven

SEPTEMBER 9, 2011

The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. New product development is such a big piece of building new business, or so we are told. Net present value [NPV] is a case in point. It is among the most transactional of all businesses.

Innovation 50

Innovation NPV Business Model Constraint 50

Harvard Business Review

MARCH 1, 2017

Blockchain was originally developed as the technology behind cryptocurrencies like Bitcoin. Done right, ICOs can not only improve the efficiency of raising money, lowering the cost of capital for entrepreneurs and investors, but also democratize participation in global capital markets.

Finance 8

Finance IPO Banking Venture Capitalist 8