Harvard Business Review

APRIL 16, 2012

Strategic cash usually is invested in high quality short-term securities; this ensures safety and liquidity, but produces a meager return on investment—especially in a low interest rate environment—and does not achieve the company's cost of capital. How Should You Approach Strategic Cash?

Company 13

Company Cost of Capital Finance Long-term 13

Harvard Business Review

SEPTEMBER 8, 2011

Forget the deficit, monetary policy, stimuli, stock markets, corporations, taxes — that stuff makes my head spin (and apparently the economy as well). Banks aren't looking for cheaper capital; they are looking for lower risk. Most importantly, the answer to most problems is usually simple.

GDP 12

GDP Planning Cost of Capital Banking 12

Harvard Business Review

APRIL 23, 2015

The basic principles are: If you want to earn above the cost of capital (if you want to create value), you must get a higher return on your efforts than the average competitor. To get a higher return than the average competitor, you must have an advantage or you must compete in an unusually attractive sector.

Strategy 8

Strategy Porter Price Cost of Capital 8

Harvard Business Review

FEBRUARY 1, 2018

The cost of capital is at historic lows, averaging below 6% for most large U.S. Indeed, for most companies, the value of accelerating growth greatly exceeds the value of returning capital to shareholders. The intrinsic value of a company with growing cash flows doubles every time the discount rate is cut in half.

Supply Chain 9

Supply Chain CEO Discount Retail 9

Harvard Business Review

MAY 14, 2013

The resulting chaos in Europe''s energy and environmental policies is threatening carbon-reduction initiatives in Australia, Asia, and elsewhere. European policy makers have proposed a multistep process to correct the immediate imbalance caused by the weak economy.

Price 8

Price Energy Politics Marketing 8

Harvard Business Review

DECEMBER 13, 2017

Investors punish companies with a short-term orientation by applying higher discount rates to them, which increases the cost of capital for those companies. In contrast, companies with a long-term orientation are rewarded with a lower cost of capital, which allows them to afford more innovation—a virtuous cycle.

Short-term 8

Short-term Decentralization Company Trends 8

Harvard Business Review

FEBRUARY 7, 2017

The capital charge equals the amount of invested capital times the opportunity cost of capital — that is, the return that shareholders expect to earn from investing in companies with similar risk. In this case its capital charge is $800 times 8%, or $64. Where Do We Go from Here?

Long-term 8

Long-term EPS Short-term Management 8