Why Sit on All that Cash? Firms Uncertain on Cost of Capital
Harvard Business Review
MARCH 10, 2011
With a record $2 trillion in cash and short-term liquid assets on hand, U.S. 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.