Cost of Capital, Leadership and Present Value

What Shareholder Value is Really About

Harvard Business Review

OCTOBER 3, 2011

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.

Short-term

Short-term Long-term Price CEO

Is Your Business Biased Against Innovation?

Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital.

Innovation

Innovation NPV Business Model Constraint

Leadership Digital

What Shareholder Value is Really About

Is Your Business Biased Against Innovation?

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