Harvard Business Review
APRIL 26, 2017
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. The design and user experience aspect is especially out of sync with bank culture, and many banks struggle with internal resistance.
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.
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Harvard Business Review
FEBRUARY 7, 2017
Companies deliver superior results when executives manage for long-term value creation and resist pressure from analysts and investors to focus excessively on meeting Wall Street’s quarterly earnings expectations. In this case its capital charge is $800 times 8%, or $64. This has long seemed intuitively true to us.
Strategy Driven
SEPTEMBER 9, 2011
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. Given that some of these problems are rooted in people’s tendency to resist change, do newer firms have an advantage when it comes to creating the best new business models?
Harvard Business Review
MARCH 1, 2017
Second, because it’s centralized, which makes it resistant to change and vulnerable to systems failures and attacks. Done right, ICOs can not only improve the efficiency of raising money, lowering the cost of capital for entrepreneurs and investors, but also democratize participation in global capital markets.
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