I think we have to examine whether the business devision earns higher WACC (weighted average cost of capital)
if a Retun on Employed Capital (ROCE) > WACC, we keep the business, otherwise we abandon it.
What do you think? Am I correct or not?
Thank you
sooraj
#2
I am not sure if it would be that simple though. (Note I have absolutely no experience in the field).
Shouldnt they look at how ROCE got affected by currency translations gains/losses?
Hi the currency issue is not relevant with the topic.