Buch, Arne; Dorfleitner, Gregor; Wimmer, Maximilian - In: Journal of Banking & Finance 35 (2011) 11, pp. 3001-3009
This paper considers the financial optimization problem of a firm with several sub-businesses striving for its optimal RORAC. An insightful example shows that the implementation of classical gradient capital allocation can be suboptimal if division managers are allowed to venture into all...