Understanding RoCE and RoE. Which one should you target?

Jun 20, 2020

Higher RoCE means lenders are rewarded better than equity shareholders. This is not a good sign for equity investors. It also means company can use capital intelligently to reduce cost of capital.

So, look for companies where RoE and RoCE are near to each other and both are above 15% to 20% which is cost of capital for most companies in India.


More: WHAT IS A BETTER MEASURE FOR EQUITIES: ROE OR ROCE?

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