Microlimp does not raise any new finance during the year, but it generates a lot of earnings,

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Microlimp does not raise any new finance during the year, but it generates a lot of earnings, which are immediately reinvested. If you were calculating the company's return on capital, would it make more sense to use capital at the start of the year or an average of the starting and ending capital? Would your answer change if Microlimp made a large issue of debt early in the year? Illustrate your answer with simple examples
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Fundamentals of Corporate Finance

ISBN: 978-0077861629

8th edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus

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