Taxation in Colorado

Taxation in Colorado

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This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1902 edition. Excerpt: ...these quotations are merely nominal, no sales having been made for a long time. Sometimes the quotations have reference to the occasional sale of a few shares, giving no knowledge of the probable selling price of the entire stock, or of a controlling interest, or even of any large block of shares. When sales are frequent the quotations are of greater importance, but it is often impossible to determine whether they represent a real value or are merely the result of the manipulations of financiers and speculators. Also the market value of stock is often based upon a-hope, more or less well founded, of increased earnings at some future time. All of these and other circumstances must be taken into consideration, but the fundamental and final question which a-bona. fide purchaser must ask is, what is the earning capacity of the corporation, what is it worth as a source of income? The gross earnings a-re important as indicating the magnitude of the enterprise, but it is the net earnings which constitute the investor's income and in which he is therefore chiefly interested. A corporation is worth, then, the capital-' ized value of present or prospective earnings, and this capitalized value is the amount which the property will bring at a fair voluntary sale. When the net income is fixed and certain, as in the case of "gilt-edged" bonds, the rate of capitalization is low, say four or five per cent. When the net revenue is more or less uncertain, because of a greater or less degree of risk, the net revenue will be capitalized at a higher rate of interest, say six, ten or twenty per cent. In any case, the buyer will pay, if necessary, the full value of the property, estimated on the basis of present or prospective net earnings....show more

Product details

  • Paperback | 30 pages
  • 189 x 246 x 2mm | 73g
  • Rarebooksclub.com
  • United States
  • English
  • black & white illustrations
  • 123681956X
  • 9781236819567