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Research Shows That Low-Carbon Companies Perform Better

The Horizons Tracker

A recent study from Kyushu University examined how corporate climate change actions affect the cost of capital for 2,100 Japanese listed companies from 2017 to 2021. They looked at the impact of corporate climate change actions, including carbon performance, climate-related disclosures, and commitments, on the cost of capital.

Company 72
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Entrepreneurship Suffers When Well-Paid Jobs Are Plentiful

The Horizons Tracker

They believe that their findings add additional nuance to the current narrative that suggests that the decline in entrepreneurship is largely a consequence of higher startup costs, labor constraints, or even the aging population. Opportunity costs.

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

Harvard Business Review

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.

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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 28
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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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Should Companies Retain "Strategic" Cash?

Harvard Business Review

This raises the question of whether retaining strategic cash makes economic sense and should be viewed as a legitimate corporate finance tool in today's environment. Strategic cash also can be used to finance long-term reinvestment programs in the business—which is especially valuable to companies in capital-intensive industries (e.g.,

Company 15
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Still Many Ways to Skin a Capital Cost

Harvard Business Review

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. It's the opening paragraph of a Harvard Business Review article called "What's Your Real Cost of Capital?"

CAPM 15