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Strategy

Advantage, Returns, and Growth-in That Order

Sometimes the best path to creating shareholder value is to decrease ROI and increase growth rates. But that is an option only after you have moved ROI sufficiently above the cost of capital, and the economic linkages between the core businesses and adjacent markets are real. The Perspective bases its argument on research that examines the relationship between the valuation multiples of companies and after-tax returns on invested capital.

Strategy