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Still Many Ways to Skin a Capital Cost

Harvard Business Review

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. ". McNulty et al.

CAPM 13
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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies. Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital.

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

Harvard Business Review

Fully 79 percent of companies, including 91 percent with annual revenues greater than $1 billion, use discounted cash flow techniques. There is less consistency, however, in how organizations estimate cash flows and determine the weighted average cost of capital at which those cash flows are discounted.