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. Not at all, he said, because it's "no secret that applying the CAPM is as much an art as financial science."

CAPM 13

CAPM Cost Discounted Cash Flow Cost of Capital 13

Harvard Business Review

JANUARY 15, 2014

If so, we should use a set of processes when designing and launching businesses that are geared for prediction — ask the right questions, perform the right analyses, plan production and supply chain for predictable variations on projected sales. An easy way to begin addressing the problem is to examine the accuracy of your projections.

Black-Scholes 8

Black-Scholes Productivity Products CAPM 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. More than one-third of organizations forecast explicit cash flows for the first 10 years of a project. What's holding them back?

Cost of Capital 12

Cost of Capital CAPM Cost Discounted Cash Flow 12