[g / ROIC]
This is the Business retention.
This answers:
“How much total capital must stay inside the business to grow at g?”
Always correct
Structural
Independent of financing
This is non-negotiable
[Equity_op / Invested Capital]
This answers:
“If leverage stays stable, what fraction of new capital will equity fund?”
A financing assumption
Not a growth formula
Not a return formula
You multiply them.
[g / ROE_clean]
→ assumes equity funds everything
[Equity_op / Invested Capital alone]
→ ignores how much reinvestment is needed
[Combination of both]
→ separates business need from financing choice