Capital allocation decision

Capital allocation decision

Allocation of invested funds between risk-free assets and the risky portfolio.

Capital Allocation Decision

A company's or manager's decision on where to place recourses such that they produce the maximum possible return for shareholders. Capital allocation decisions represent attempts to produce profit in the most efficient way possible. They can be quite difficult to make, as the options for capital allocation are virtually limitless. Capital allocation decisions may involve making more of the same product, investing in research to invent new products, paying out more in dividends, or making any number of different decisions.
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They are more difficult than the capital allocation decision. An organization needs to have a systematic process for making people decisions that is just as rigorous as the one it has for making decisions about capital.
They are essentially a capital allocation decision. A company in the mining or energy sector may be better off deferring investment after the capital expenditure binge of recent years and the subsequent downturn.
The main point of this literature is that the probability distribution of cash flows associated with a given capital allocation decision is partly endogenous in that it is affected by a variety of factors -- the project choice, the decision of what resources to allocate in managing the project, the financing mix, the mode of organization/incorporation for the project, the managerial compensation scheme, etc.
He believes this "aggressive" capital allocation decision should generate "significant" equity value in the context of maintained full year guidance.
Barrick will apply the same rigor and scrutiny to its new digital projects as it would for any other capital allocation decision. Ultimately, digital reinvention is expected to help Barrick deliver on its vision of growing free cash flow per share over the long term.
Our financial principles--including a focus on the retention of strong credit metrics--will continue to govern our decision making and all capital allocation decisions," Mr Vassella said.
I look forward to working closely with Jeff on capital allocation decisions going forward.'
This would allow value-adding capital allocation decisions, benefiting from M&P's access to both flexible and low-cost debt and to capital markets."
When making capital allocation decisions, Sony will continue prioritizing investments aimed at growing profit over the long term.
"Indeed, some recent developments represent some of the worst capital allocation decisions we have ever seen." ADW said that its regular inquiries into the company have recently uncovered a "harrowing pattern of poor judgment and capital allocation follies," pointing to the spending of about $14M incrementally in corporate G&A last year.
In pursuit of this objective, Wellington Management will identify and select approximately 40 companies that they believe demonstrate exemplary long-standing ESG practices and have strong business fundamentals and management teams with proven track records of good capital allocation decisions for shareholders.
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