Question: What is return on invested capital (ROIC)? Why is the spread between ROIC and WACC so important? MINI CASE You have been hired as a

What is return on invested capital (ROIC)? Why is the spread between ROIC and WACC so important?

MINI CASE

You have been hired as a consultant to Kulpa Fishing Supplies (KFS), a company that is seeking to increase its value. KFS has asked you to estimate the value of two privately held companies that KFS is considering acquiring. But first, the senior management of KFS would like for you to explain how to value companies that don’t pay any dividends. You have structured your presentation around the following questions.

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ROIC is the return on the capital that is in place at the b... View full answer

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