return on investment

investment, interest, return, equity

why do we add the aftertax interest expense?

ROI = (NI+ATIE) / (avg LT liabilities + equity)

NakedPuts2011

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发表于 2011-7-13 14:25 | 只看该作者

Since we are calculating the return from the perspective of both the debt holders and equity holders, we need to include the returns for the debt holders (ATIE) and equity holders (NI).

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return on investment

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