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

APRIL 16, 2012

To enhance financial flexibility, companies have been retaining unprecedented amounts of cash on their balance sheets, calling it "strategic" cash to distinguish it from the "operating" cash that is needed to run the business. Arguments for Strategic Cash. Facilitate Investments. energy or telecom) or research-intensive industries (e.g.,

Company 13

Company Cost of Capital Finance Long-term 13

Harvard Business Review

APRIL 16, 2015

Unless your company’s return on capital exceeds its cost of capital, no amount of revenue growth can create value. For the many firms whose cost of capital and return on capital are roughly equal, in fact, the only path to value creation is to increase return on capital.

CEO 8

CEO ROIC Cost of Capital Merton 8

Harvard Business Review

JUNE 18, 2015

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. Rather, they rely on internal rates of return and multiples of invested capital.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

OCTOBER 10, 2017

One reason for the paltry performance is that while other business areas, like sales or finance, are considered to be core functions, innovation is often considered to be something that’s “nice to have” rather than essential. Another pervasive reason is that senior executives are trained as operators, not innovators.

Innovation 8

Innovation P&L ROI Long-term 8

Harvard Business Review

APRIL 26, 2017

And our analysis suggests there are strategies that they can use to compete successfully online. Banks’ cost of capital is typically 50 basis points or less. These low-cost and reliable sources of funds are from taxpayer-insured deposits and the Federal Reserve’s discount window. Eastern Bank).

Banking 11

Banking Stage-Gate Credit Scoring Competitive Advantage 11

Harvard Business Review

NOVEMBER 25, 2013

This lack of an analytical approach has traditionally formed a barrier between marketing and finance. Creating transparency into its operations is the starting point for marketing to help CFOs understand where and how value is being gained or lost, which makes budgeting discussions much more productive. Ask for the CFO’s help.

CFO 8

CFO Short-term Long-term Benchmarking 8