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Why would a company calculate their Risk Adjusted Return on Capital?

• Is required by the SEC

 

• Auditors will overlook other abnormalities if a firm demonstrates a favorable R A R O C

 

• Gives companies the ability to allocate capital in the optimal structure

 

• Keeps the financial analysis department busy

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Question added by Shazia Anees , Assistant Manager Finance , Arham Trading Company
Date Posted: 2015/05/22
Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Gives companies the ability to allocate capital in the optimal structure is the right answer.

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