How to calculate ROI in debt investment ? | DeZyre

How to calculate ROI in debt investment ?

0

sujith

Hi Binny , i am so confused with ROI in the module of how to raise money using debt! Return on investment is the return on the whole investment and not only on the equity rt? if it was ROE it makes sense that debt increases the return but how will it be for ROI? Can i have ur email id plz?

ROI Return On Investment Banking Jobs Returns Finance Interview Questions Debt

Oct 19 2012 01:46 PM

3 Answer(s)

0

Binny

Hi Sujith, Sorry about the confusion. In this module we are indeed measuring ROE and I am referring it to as the ROI since from the Investors standpoint, his/her only investment is the equity part. The debt is typically taken on the company's books not the investors. So in this module everytime you hear ROI, I am actually referring to the ROE for the investor. Is that clear. My email id is binny@dezyre.com, but you could ask the questions on this forum itself for the benefit of the other students.

Oct 23 2012 06:09 PM

0

Binny

Also Sujith in the most conventional sense ROE is calculated as Net Income come divided by Shareholders equity. In our case, since the only investment is the equity we use ROI to indicate the returns to the equity investor.

Oct 24 2012 10:18 AM

0

Binny

Click this link to read about the Ultimate Guide to Financial Modelling

Nov 11 2013 12:43 PM

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