In today’s briefing:
- Will the Challenges that Have Taken a Decade to Make Progress Finally Be Resolved?
Will the Challenges that Have Taken a Decade to Make Progress Finally Be Resolved?
- Without the driving force to generate cash flow in excess of the discount rate (cost of capital), there is not enough power to push stock valuations higher and higher.
- The fact that 8% ROE is the threshold at which valuations change means that investors consider the cost of capital for Japanese equities to be roughly 8% on average.
- Little progress has been made since 10 years ago, when the Ito Report advocated “shift to corporate value management with an awareness of capital efficiency” and “engagement of institutional investors.”
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