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.
With the cost of capital back to normal levels, it’s simply irresponsible not to make it a management discipline that changes the way you do business. To do that, executives need to rediscover the concept of economic profit — that is, revenue minus not just operating and administrative costs, but also the cost of the capital needed to produce that revenue.
Indeed, when our colleagues3,100 executives about forces that had disrupted their business last year, interest rates and inflation topped the list. When the executives were asked about threats to their business in 2024, interest rates and inflation again led the list, ahead of other issues such as politics, regulation, AI, or climate change.Accelerate your career with Harvard ManageMentor®.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
SVB's Big Annual Wine Report Shows How the Wine World Can AdaptWe dig into the big report that has the industry buzzing.
Read more »
Polar bears unlikely to adapt to longer summersMore time stranded on land means greater risk of starvation for polar bears, a new study indicates. During three summer weeks, 20 polar bears closely observed by scientists tried different strategies to maintain energy reserves, including resting, scavenging and foraging.
Read more »
Columbus unites community intervention groups for focused strategy against violenceColumbus's newly-created Office of Violence Prevention is now working with community and city-funded intervention groups to create a single strategy.
Read more »
StrategyBusiness Insider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know.
Read more »
Shocking Bitcoin Strategy from BlackRock Calls for 28% AllocationBlackrock has allegedly suggested a staggering 28% allocation to Bitcoin for investors' portfolios during a private event
Read more »
Wendy’s ‘surge-pricing’ strategy scrubbed after viral backlashUber-like 'surge pricing' may be coming to a fast food restaurant near you.
Read more »