From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Dec 27 2007 - 16:47:44 EST
"A decline in the real rate of return on capital does not make investors worse off or weaken the incentive to invest if the real cost of capital declines proportionally." Daniel M. Holland & Stewart C. Myers, "Profitability and Capital Costs for Manufacturing Corporations and All Nonfinancial Corporations". The American Economic Review, Vol. 70, No. 2, Papers and Proceedings of the Ninety-Second Annual Meeting of the American Economic Association (May, 1980), p. 320. (Daniel M. Holland edited a volume on this subject: Measuring profitability and capital costs; an international study. Lexington, Mass. : Lexington Books, 1984). I'm left musing where capitalism would be, if it wasn't for corporate self-financing... J.
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