Is our business profitable for investors?

Let’s look at our lender, he gave a loan of $ 250, the business is profitable, we can pay him 10% a year, he is happy because he receives 10% of the return on invested capital. Let’s look at the investor who bought the shares: he received 100% of the return on invested capital, compared with only 10% received by the lender. Who had a better deal? Obviously, from an investor who bought shares. Continue reading →