HBSP (USA)
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What Managers Get Wrong About Capital
Martin, Roger L.Article HBS-R2003E-EFinanceWhy do large corporations sell off business units to PE firms that make a fortune by selling them a few years later? The author, a former Rotman School dean, argues that the answer is rooted in the way many corporations value their businesses and projects. Their basic mistake is to compare estimates of future cash flow with the amount of cash put into a business as a capital investment. Although this sounds perfectly reasonable (and largely follo...Starting at €8.20