Tuesday, November 3, 2015

The Hazards of Growth

YOUNG S. David, KAISER Kevin
Access the publisher's website
Journal of Applied Corporate Finance 27, 3 (2015) 88-95

The article discusses the danger associated with corporate growth strategy. Topics include automaker General Motors as an example of how a value-destroying growth investment can result in bankruptcy and a bailout from the government, the implications of an undue focus on growth on companies, and how companies can consistently earn expected returns above opportunity cost of capital