Is Return on Capital (ROC) affected by changes in debt
What happens to ROC if you increase debt...I believe it would just stay the same, correct?
What happens to ROC if you increase debt...I believe it would just stay the same, correct?
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Look at the formula for ROC: http://en.wikipedia.org/wiki/Return_on_capital
If the denominator is going up and all else remains equal, you're naturally going to have a lower ROC.
Also... why did you tag this "Goldman Sachs?"
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