Harvard Business Review

MARCH 10, 2011

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

JUNE 18, 2015

We also know that private equity funds have outperformed public equity markets over the last three decades , even after the fees they charge are accounted for. Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

APRIL 2, 2014

You know, the future value of money, the present value of money — money today is worth more than in the future because you can invest it and get interest. 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.

CAPM 8

CAPM Discount Price Finance 8