Studies in securities

Bibliographic data

Monograph

Identifikator:: 1757542078

URN:: urn:nbn:de:zbw-retromon-134903

Document type:: Monograph

Title:: Studies in securities

Edition:: Revised

Place of publication:: New York

Publisher:: Jas. J. Oliphant & Co.

Year of publication:: 1927

Scope:: 81 S.

Digitisation:: 2021

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Detroit Edison Co.

Collection:: Economics Books

STUDIES IN SECURITIES RE a ie] jis square miles, 19 cities, and 162 smaller communities make up the whole territory. Around 40% of revenue is from sale of electricity for power, so that 24-hour use of the plants is greater than with most companies, and is assisted by the increasing daytime residence consumption shown in averages of 415 k. w. in 1920, 460 in 1923, and 519 in 1926. Comparing 1926 and 1921, the gross revenues were $44,855,000 and $23,383,000, the funded debt was $86,337,- 000 and $64,299,000, and the stock outstanding was $86,543,000 and $28,013,000 in the respective years. The present stock in- cludes $32,269,800 exchanged at par for convertible debentures sold in 1923 and earlier. In 1926 $15,000,000 5% junior mortgage bonds were offered to the public on 4.90% basis, and in 1927 $20,- 000,000 more at 4.85%, indicating Detroit Edison’s high credit rating. Upon the $172,880,000 capitalization beginning 1927, the annual interest requirements were $4,531,000 and the dividends at 8% are $6,923,000, the total being 6.6% on bonds and stock together, or well within the accepted fair return on public service property. Earnings for the stock were as follows: 11.3% a7 1.0 1923...: 1922... 4% 1921... Varying reserves are made from earnings against plant deprecia- tion; the unused balance in the fund was $2,848,000 in 1921 and $14,079,000 in 1926; in three years 1924-26 $13,515,000 was ap- propriated from earnings and $2,043,000 from surplus to the re- serve, and it would according to official statement be adequate for the next few years without additions. The immediate advantage to stockholders of the policy of financing by partner subscription is the receipt of valuable rights. Offerings of new stock were in 25% ratio in 1923 and 1924 and 10% in 1925 and 1926, and in the last two years the subscription right was worth $3 to $4, or a sizeable bonus with the cash dividend. Detroit Edison stock is a sound investment affording a good income return. Erie R. R. Only four railroads run all the way from New York to Chicago and of these only Erie R. R. does not pay dividends. By tradition the Erie capitalization of $200,000 per mile of road is extravagant, but an estimate of $700,000 a mile was recently placed on record as the current cost for construction of a vital trans-Pennsylvania segment to make up a proposed fifth trunk line. Apart from pres- 1371

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