Harvard Business Review

MARCH 10, 2011

Estimating the rate at which to discount the cash flows — the cost of equity capital — is an integral part of the exercise, and the choice of rate has a significant effect on estimates of a project's or a company's value. The same is true for the CAPM. ". That paragraph isn't my own writing.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

JUNE 18, 2015

In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders. In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 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