Publications

2009
Case

Midland Energy Resources, Inc.: Cost of Capital: Brief Case No. 4129.

By: Timothy A. Luehrman and Joel L. Heilprin

The senior vice president of project finance for a global oil and gas company must determine the weighted average cost of capital for the company as a whole and each of its divisions as part of the annual capital budgeting process. The case uses comparable companies to... View Details

Keywords: Capital Budgeting; Cost of Capital; Energy Industry

February 2001 (Revised April 2001)
Case

CDC Capital Partners

By: G. Felda Hardymon, Josh Lerner and Ann Leamon

In 2001, CDC Capital Partners is facing the greatest challenge in its 53-year history. Founded as part of the U.K. government's post-war colonial reconstruction, it had operated as a developmental finance institution, largely issuing debt to the world's poorest... View Details

Keywords: Business or Company Management; Private Equity; Emerging Markets; Cost vs Benefits; Mergers and Acquisitions; Partners and Partnerships; Financial Institutions; Financial Services Industry; United Kingdom

04 Oct 2007
What Do You Think?

Has Managerial Capitalism Peaked?

to take into account the cost of capital employed during the term of the option. The severance payment arrangements to which they agree are too lavish, regardless of the reasons for severance. Jensen and... View Details

Keywords: by Jim Heskett

01 Mar 2014
News

Innovation: Crowdfunding College Costs

Savingforcollege.com, which Cordero describes as "the Consumer Reports of 529 plans.") The plan is to capitalize on market share down the road: "There is a lot of value in processing millions of dollars of new assets," he remarks. "Our... View Details

Keywords: Hanna, Julia; Gradsave; crowdfunding; Colleges, Universities, and Professional Schools; Educational Services; Finance

March 1988 (Revised June 1993)
Background Note

Leveraged Betas and the Cost of Equity

The objective is to delineate on methodology for measuring the risk associated with financial leverage and estimating its impact on the cost of equity capital. View Details

Keywords: Cost of Capital; Capital Structure; Equity

May 2024
Supplement

Forest Park Capital (B)

By: Richard S. Ruback and Royce Yudkoff

During the Covid-19 Pandemic in 2020, Betsy Harbison formed the search fund Forest Park Capital with the intention of purchasing a small business. The case conveys the details of Betsy’s final decision at the terminus of her search, between a software company... View Details

Keywords: Search Fund; Entrepreneurship Through Acquisition; Acquisition; Small Business; Cost vs Benefits; Decisions; Business Education; Corporate Entrepreneurship; Leadership Style; Leading Change; Business or Company Management; Problems and Challenges; Tourism Industry; Web Services Industry; North America; Missouri

Minimum capital requirements are a central tool of banking regulation. Setting them balances a number of factors, including any effects on the cost of capital and in turn the rates available to borrowers. Standard theory predicts that, in perfect and efficient... View Details

2008
Working Paper

Cost of External Finance and Selection into Entrepreneurship

By: Ramana Nanda

This paper examines the extent to which the positive relationship between personal wealth and entry into entrepreneurship is due to financing constraints. I exploit a tax reform and use unique micro-data from Denmark to study how exogenous changes in the cost of... View Details

Keywords: Business Startups; Entrepreneurship; Cost; Financing and Loans; Personal Finance; Human Capital; Wealth; Denmark

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10 Jun 2010
Working Paper Summaries

Corporate Governance and Internal Capital Markets

Keywords: by Zacharias Sautner & Belén Villalonga

Article

Raising Capital Requirements: At What Cost?

By: Malcolm Baker and Jeffrey Wurgler

Since the financial crisis, bank capital positions have improved considerably. However, calls for heightened capital requirements have not abated. Federal Reserve Chair Ben Bernanke, Vice Chair Janet Yellen, and governors Daniel Tarullo and Jeremy Stein have all... View Details

Keywords: Laws and Statutes; Capital; Banks and Banking; Banking Industry

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March 2015
Case

BOLT: Seed Venture Capital Firm

By: William A. Sahlman and Robert F. White

BOLT is a different kind of seed venture capital firm built to serve the needs of early-stage startups at the intersection of hardware and software.

In the past decade, the cost of entrepreneurial experimentation has dropped dramatically, particularly in web... View Details

Keywords: Entrepreneurial Finance; Accelerator; Entrepreneurship; Finance; Venture Capital; Applications and Software; Information Infrastructure; Strategy

2010
Working Paper

Corporate Governance and Internal Capital Markets

We exploit an exogenous shock to corporate ownership structures created by a recent tax reform in Germany to explore the link between corporate governance and internal capital markets. We find that firms with more concentrated ownership are less diversified and have... View Details

Keywords: Cost vs Benefits; Capital Markets; Corporate Governance; Taxation; Ownership; Performance Efficiency; Diversification; Germany

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May 2010
Supplement

Tremblant Capital Group Exhibits (CW)

By: Robin Greenwood

Brett Barakett, CEO and founder of Tremblant Capital Group, a New York-based hedge fund, must decide what to do with his fund's position in Green Mountain Coffee Roasters, which has dropped in value by more than 40 percent in recent months. Tremblant is a hedge fund... View Details

Keywords: Transformation; Decisions; Forecasting and Prediction; Cash Flow; Cost of Capital; Stocks; Investment Funds; Consumer Behavior; Business Strategy; Competitive Advantage; New York (state, US)