The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 1782637850

URN:: urn:nbn:de:zbw-retromon-178813

Document type:: Monograph

Author:: Westergaard, Harald http://d-nb.info/gnd/117574163; Nybølle, Hans Cl. http://d-nb.info/gnd/127386696

Title:: Grundzüge der Theorie der Statistik

Edition:: 2., völlig umgearb. Aufl.

Place of publication:: Jena

Publisher:: G. Fischer

Year of publication:: 1928

Scope:: 640 Seiten

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

230 NATURE OF CAPITAL AND INCOME [Cuar. XIV of calculating the rate of value-return is as follows: A specified property entitles the owner to a future series of income items which is assumed to be definitely foreknown. These items are all discounted by means of a specified rate of interest. The sum of the discounted values constitutes the capital-value of the property. This capital-value, at any time, taken as divisor and the income per year taken as a dividend gives the rate of value-return as quotient. It must be steadily borne in mind that the value of the capital which forms the divisor is not a fictitious book value, nor the value as indicated by the sum of money originally invested, but is simply the discounted value, at the specified time, of the expected income subsequent to that time. We should at the outset rid our minds of the bogey of an unvarying “ principal’ perpetually existing somewhere in a debt or other property. The only value entity we have to deal with is the value of the property considered, which is the discounted value of the expected income, and which therefore is continually changing. When capital is for the present yielding no income, as, for instance, vacant land, it nevertheless is expected some- time to yield income, and it is the discounted value of this remote income which alone constitutes the present value of the land. It is true that a speculator may prize the land simply because he thinks he can sell it later to some one else, and to him it may seem that its value is inde- pendent of any future income, and depends only on the future capital-value at which he expects to sell. But it is clear that this future capital-value is itself the discounted value of the income which the then purchaser will expect. Or, if he too be a speculator, and his valuation, like his predecessor’s, depends on a resale, the dependence on future income is merely again postponed to the time when some purchaser shall buy the land for the income it will yield. This ultimate expected income gives the basis for all prior capital valuations. Were there no expectation

Access restriction

Copyright

fullscreen: The nature of capital and income

Monograph

Table of contents

Download

Monograph

This page

Image fragment

Citation links

Citation recommendation