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.

More On This Topic
  1. How To Reduce Capital Gains Tax In Canada
  2. States With The Death Penalty
  3. Difference Between Capital Murder & First-Degree Murder
  4. Where Do You Report Stock Loss On An Income Tax Return
  5. Do I Have to Pay Taxes on Capital Gains If I Trade Stocks in the U.S.?
  6. What Does Fed OASDI/EE Mean on a Paycheck?
  7. W-4: What It Is, Who They’re For, & How To Fill It Out
  8. Which Mutual Fund Has the Highest Return with the Lowest Risk?
  9. Do I Need to Pay Capital Gains Tax on Investment Property?
  10. How To Calculate Corporate Tax Liability

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)


Link to This Definition
Did you find this definition of RISKADJUSTED RETURN ON CAPITAL (RAROC) helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary