Harvard Business Review

MARCH 1, 2024

While many executives and investors were thrown by last year’s interest rate increases, the cost of capital needn’t be a threat. Companies that integrate the cost of capital into their strategy and planning reap real benefits. When something is cheap, people waste it.

EPS 22

EPS Cost of Capital Strategy Cost 22

Harvard Business Review

OCTOBER 13, 2015

This puts downward pressure on stock prices because with lower EPS growth, shareholder expectations of future growth drop, lowering EPS multiples and hence stock prices. The way to do that is to build market share in international markets at a level of profitability that is higher than the cost of capital.

EPS 8

EPS Short-term Cost of Capital Long-term 8

Harvard Business Review

APRIL 5, 2017

If a company has beat or missed its EPS targets by less than two cents , that means the company has nipped and tucked its quarterly results just enough to meet the target EPS number it committed to analysts. Of these, the last indicator is perhaps the most likely to accurately capture a company’s short-termism.

EPS 8

EPS Metrics Depreciation Short-term 8

Harvard Business Review

FEBRUARY 7, 2017

Earnings-per-share (EPS) growth: Difference between EPS growth and true earnings growth. We hypothesize that long-term companies are less likely to overindex on analyst metrics like EPS and less likely to consistently take actions (such as share repurchases) that boost EPS.

Long-term 8

Long-term EPS Short-term Management 8