Harvard Business Review
FEBRUARY 1, 2018
The cost of capital is at historic lows, averaging below 6% for most large U.S. Indeed, for most companies, the value of accelerating growth greatly exceeds the value of returning capital to shareholders. The intrinsic value of a company with growing cash flows doubles every time the discount rate is cut in half.
Harvard Business Review
JULY 31, 2017
Based on our recent worldwide survey of 2,000 incumbent companies across all major industries and countries, we estimate that the average return on incumbent digital initiatives is below 10% — barely above the cost of capital. The first three are primarily offensive, targeting new demand, new supply or new business models.
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Harvard Business Review
APRIL 5, 2017
However, higher accruals can reflect either innocuous aspects of certain business models, such as in the construction industry, where the time lag between earning income and realizing cash is long, or that growing firms retain higher working capital to meet greater current and future customer demand.
Harvard Business Review
APRIL 26, 2017
This finding confirms what bankers fear: digitization upends business models, enabling greater competition that puts pressure on incumbents. Banks’ cost of capital is typically 50 basis points or less. They estimate that online lenders will constitute nearly a fifth of the total SME lending market by then.
Harvard Business Review
OCTOBER 11, 2013
The business model centers on the old razor blade strategy: Sell the machine at just above cost and make high margins on the system’s consumable element – patented plastic pods. With the company’s share price sinking and its cost of capital rising, those deals might have to be put on hold.
Harvard Business Review
OCTOBER 21, 2016
Traditional business models aim to create value for shareholders, often at the expense of other stakeholders. Sustainable businesses are redefining the corporate ecosystem by designing models that create value for all stakeholders, including employees, shareholders, supply chains, civil society, and the planet.
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. Given that some of these problems are rooted in people’s tendency to resist change, do newer firms have an advantage when it comes to creating the best new business models?
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