What is RISKADJUSTED RETURN ON CAPITAL (RAROC)?

A calculation where expected losses and expenses are subtracted from revenue, income from capital is added, and this amount is divided by capital to determine risks on projects being considered for investment.

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Related Legal Terms
RISKADJUSTED CAPITAL, RETURN OF CAPITAL, RETURN ON CAPITAL EMPLOYED (ROCE), NET RETURN, RETURN ON CAPITAL (ROC), NET REALIZABLE CAPITAL GAIN PER SHARE, ECONOMIC CAPITAL, CAPITAL ALLOCATION, CAPITAL LOSS CARRYOVER, RETURN ON INVESTMENT (ROI)


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