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Adapt Your Strategy to Higher Interest Rates

Harvard Business Review

While many executives and investors were thrown by last year’s interest rate increases, the cost of capital needn’t be a threat. Companies that integrate the cost of capital into their strategy and planning reap real benefits. When something is cheap, people waste it.

EPS 22
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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

They are all very useful tips that can make a sustained difference to how your teams perform. 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).”

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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

Our research has found that embedded sustainability drives financial performance through mediating factors such as innovation, operational efficiency, risk reduction, employee recruitment, engagement and retention, customer and supplier loyalty, competitive advantage, reduced cost of capital, and improved marketing and sales.

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Activist Hedge Funds Aren’t Good for Companies or Investors, So Why Do They Exist?

Harvard Business Review

This is ironic, of course, because studies show the majority of acquisitions don’t earn the cost of capital for the buyer. That is because the acquiring team dreams that the player it will pick in the draft will be more awesome than that player is likely to turn out to be.

Hedge 8
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The Three Decisions You Need to Own

Harvard Business Review

When resources are allocated from the bottom up instead of from the top down, they get out of sync with what the senior team is trying to accomplish. That outcome reflects the wrong allocation and/or ineffective execution.

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Desperately Seeking Simplicity

Harvard Business Review

Today, only 9% of businesses in the world have achieved even a modest level of sustained, profitable growth over the past decade on average (5.5%, earning cost of capital) and that is declining — even though virtually all the businesses aspire to something like this or more.