What Is Return of Capital?

Rate of return: The ratio of the interest paid by a bond in installments to the current market price of the bond.

Return on capital

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Rate of return: The ratio of the interest paid by a bond in installments to the current market price of the bond.
However, in the short term,
Return on capital =
Return on capital is often used to visually assess a company's value creation capabilities. A (relatively) high ROIC value is often seen as strong evidence of a company's robustness or good management. However, it must be noted that high returns on capital may also be a sign of poor management, such as over-emphasis
As an accounting assessment method, ROIC may have the following hidden dangers:
Manipulated by managers
Affected by the accounting system and changes in the accounting system;
Affected by inflation and exchange rate changes.
What is certain is that if a company's operating income is lower than the cost of capital, then it is usually impossible to create value unless its ROIC exceeds the cost of capital (WACC [Weighted Average Cost of Capital]).

IN OTHER LANGUAGES

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