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Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement.

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Entrepreneurship Suffers When Well-Paid Jobs Are Plentiful

The Horizons Tracker

The author believes that while lower costs of capital would certainly help raise the entrepreneurship rate, it would be most beneficial to entrepreneurs with lower skills. This would have less of an impact on higher-skilled entrepreneurs, for whom the decline has been most pronounced.

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Managers Need to Relearn How Interest Rates Work

Harvard Business Review

With cost of capital this low, many managers have paid scant attention to the time value of money — an essential concept in doing financial analysis. In the United States, short-term interest rates have been near zero for most of the last 15 years.

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Even for Companies, the U.S. Is Split Between Haves and Have-Nots

Harvard Business Review

The worldwide trend of rising economic inequality applies not only to individuals. companies’ return on invested capital (ROIC), and compare it with economy-wide ROIC estimates constructed by Deloitte. What are the underlying drivers of this trend? Consider what’s happening among corporations. There are many.

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Desperately Seeking Simplicity

Harvard Business Review

The presentation to 50 people was followed by a discussion of antidotes to the dangerous trends they showed. But, given the trends of speed and complexity, maybe ask yourself: is this the year for more companies to take the chance of "zero basing" what they do?

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The Case for Investing More in People

Harvard Business Review

One step in reversing this trend is to start treating hours like dollars, with a real opportunity cost. We know that great ideas that drive breakthroughs in productivity come from human beings with the time, talent and energy to innovate. It’s not money that’s in short supply; it’s good growth ideas.

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Providing Earnings Guidance? Think Again

Harvard Business Review

Less Volatility in Stock Price: The net effect of providing guidance is arguably a less volatile stock price, which can result in a lower beta and a lower cost of capital. For example, they can update investors concerning the number of customers, the headcount trends, or the anticipated spending on marketing and advertising.

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