Complimentary Resource – Change Is Constant: PMBOK Guide 5th Edition

Strategy Driven

The fifth edition of the PMBOK Guide® was released and once again the profession of project management moved forward. As Global Knowledge wraps up the current four-year review cycle and anticipate the new, refreshed outcome, they have an opportunity to identify what has changed and how it may affect the professional practice of project management throughout the world. Change Is Constant : PMBOK Guide 5th Edition. by Global Knowledge.

PMBOK 50

Still Many Ways to Skin a Capital Cost

Harvard Business Review

The motivation behind it, as with many, many articles published over HBR's nearly 90-year history, was to take an effective practice developed in one corner of industry and spread it to managers everywhere. knew that firms were making heavy use of the capital asset pricing model (CAPM) to size up growth opportunities, but that the model was only as good as its inputs. Not at all, he said, because it's "no secret that applying the CAPM is as much an art as financial science."

DCF 14
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Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

In estimating the cost of equity, nearly nine out of ten organizations use the capital asset pricing model (CAPM), which calculates the cost of equity using a risk-free rate, beta factor, and a market risk premium, each of which introduces significant variability. Budgeting Finance Strategic planning CAPMWith a record $2 trillion in cash and short-term liquid assets on hand, U.S. non-financial firms certainly seem poised to expand. What's holding them back?

What the Great Fama-Shiller Debate Has Taught Us

Harvard Business Review

Early tests of CAPM came out reasonably well, and by the end of the 1970s Fama’s former student Michael Jensen was (in)famously declaring that “I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis.”. But it’s just as valid to hold on to CAPM and label these effects market inefficiencies. Economy Finance Managing uncertainty

CAPM 12

Why Those Guys Won the Economics Nobels

Harvard Business Review

Others, most notably money managers and former Fama students Cliff Asness and John Liew in an epic Institutional Investor article , have done a lot recent to clarify how Fama’s ideas and Shiller’s can at least co-exist peacefully. Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. And the theory that was available then was CAPM. Fama and Ken French said the rewards in the market don’t just come from beta as the CAPM would have it.

CAPM 12

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

Harvard Business Review

What have been less explored are the specific actions taken by private equity (PE) fund managers. 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 financial engineering, PE investors provide strong equity incentives to the management teams of their portfolio companies.

CAPM 12