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Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement. However, she believes that there are more direct methods of effecting change.

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A Refresher on Cost of Capital

Harvard Business Review

You’ll likely be asked to show that the return on the investment will be better than your company’s cost of capital. What is the cost of capital? “The cost of capital is simply the return expected by those who provide capital for the business,” says Knight. Further Reading.

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The Complexity of Business Communication

CoachStation

Compare Michael Porter’s competitive advantage definition: “Competitive advantage, sustainable or not, exists when a company makes economic rents, that is, their earnings exceed their costs (including cost of capital).” Develop skills in story-telling and influence differently.

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Providing Earnings Guidance? Think Again

Harvard Business Review

Less Volatility in Stock Price: The net effect of providing guidance is arguably a less volatile stock price, which can result in a lower beta and a lower cost of capital. FD) constraints. After weighing the pros and cons, I come down on the side of not providing guidance.

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What Shareholder Value is Really About

Harvard Business Review

A CEO's job is about resource allocation with a goal of earning a return in excess of the opportunity cost of capital. The challenge is figuring out how to allocate human and financial capital to its best and highest use for the long term. This requires difficult trade-offs. Communication.

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The Comprehensive Business Case for Sustainability

Harvard Business Review

When firms fail to establish good relationships with their stakeholders, it can lead to increased conflict and reduced stakeholder cooperation. This can disrupt a firm’s ability to operate on schedule and budget. ” Improving risk management.

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Why Those Guys Won the Economics Nobels

Harvard Business Review

In a way it’s surprisingly close to Shiller, but Shiller’s view is that people can’t know the true model and then become excessively influenced by social forces, and can get into a herd mentality. The capital asset pricing model was supposed to allow companies to calculate their cost of capital in a consistent way.

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