Harvard Business Review

MARCH 10, 2011

It's the opening paragraph of a Harvard Business Review article called "What's Your Real Cost of Capital?" They believed managers needed a better way to come up with a number to represent their cost of capital, and that's what they were presenting. That paragraph isn't my own writing. by James J. McNulty, Tony D.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

NOVEMBER 20, 2013

Unfortunately, nearly eight in ten executives surveyed by McKinsey describe the strategic-planning processes at their companies as more geared to confirming existing hypothesis than to testing new ones. Strategic planning Strategy' Good analysis in the hands of smart managers does not automatically yield great strategy.

Strategy 8

Strategy McKinsey Strategic Planning Cost of Capital 8

Harvard Business Review

MARCH 10, 2011

Many are deeply uncertain about which initiatives they should fund — and one root of this indecision is a general lack of confidence in the cost of capital projections they are using to make the call. We find that 55 percent of respondents are convinced their cost of capital estimates are off by more than 50 basis points.

Cost of Capital 13

Cost of Capital CAPM Cost Discounted Cash Flow 13

Harvard Business Review

SEPTEMBER 8, 2014

The goal of strategy is profitable growth, meaning economic value above the firm’s cost of capital. Soon, it really doesn’t matter what your strategic planning documents say. Smartly reducing assets devoted to activities that earn less than their cost of capital requires good links with evolving market realities. (

Debt to Equity Ratio 10

Debt to Equity Ratio Cost of Capital Strategy Incentives 10

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. Net present value [NPV] is a case in point. Discovery-Driven Growth : A Breakthrough Process to Reduce Risk and Seize Opportunity by Rita McGrath.

Innovation 50

Innovation NPV Business Model Constraint 50