Remove Consensus Remove Discounted Cash Flow Remove Management Remove Marketing
article thumbnail

What Markets Do and Don’t Get About Innovation

Harvard Business Review

Disruptive innovation can take several forms, and the market understands some types better than others. But do markets really follow the logic of an academic theory? New market disruptive – a cheaper, more accessible, and worse-performing product that turns non-consumers into customers. Four types of disruption.

article thumbnail

Still Many Ways to Skin a Capital Cost

Harvard Business Review

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. How can that be when the same information about the stock's underlying company and markets are available to both?

CAPM 13
article thumbnail

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

Harvard Business Review

There was little consensus about cost of capital practices; instead, respondents typically deployed a plurality of techniques. Fully 79 percent of companies, including 91 percent with annual revenues greater than $1 billion, use discounted cash flow techniques. Current market debt/equity ratio. Privately held.