Remove CAPM Remove Development Remove Finance
article thumbnail

Still Many Ways to Skin a Capital Cost

Harvard Business Review

The motivation behind it, as with many, many articles published over HBR's nearly 90-year history, was to take an effective practice developed in one corner of industry and spread it to managers everywhere. Not at all, he said, because it's "no secret that applying the CAPM is as much an art as financial science." McNulty et al.

CAPM 15
article thumbnail

Why Sit on All that Cash? Firms Uncertain on Cost of Capital

Harvard Business Review

This is the key finding of the Current Trends in Estimating and Applying the Cost of Capital research released this week by the Association for Financial Professionals, a trade group of 16,000 corporate treasury and finance practitioners. Download this pdf for an executive summary, or login here for the full report.)

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Why Those Guys Won the Economics Nobels

Harvard Business Review

He got his PhD at Yale under Shiller’s supervision in 1984, but since then he has also done a lot of work expanding on Fama’s ideas about risk and return, some of it co-authored with Fama’s son-in-law and University of Chicago finance colleague, John Cochrane. And the theory that was available then was CAPM. It goes back to the 1970s.

CAPM 9
article thumbnail

What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

In particular, we are interested in how many of their responses correlate with what academic finance knows and what it teaches. In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies. What PE firms do after they invest.

CAPM 8
article thumbnail

Stop Trying to Predict Which New Products Will Succeed

Harvard Business Review

How you answer this question may be the most important factor in how you design your product development process — and, ultimately, in whether your business succeeds or fails. Product development' When is it possible to predict a product’s success? Is market performance predictable for a specific product or class of products?