Chapter 15: The Capitalization of All Forms of Rent

1. What relation is there between the rate of interest and the price of land bearing a given rental?

2. If a $100 share of railroad stock sells at par when interest on loans is at 5%, what will be its price when interest rises to 6%? When interest falls to 4%?

3. If a business is very successful and its dividends double, what will be the effect on the selling price of its stock?

NOTE.--The subject is almost foreign to the standard works
on economics, which have continued to look upon capital as
primary, and its income as derived. Numerous recent
articles will be found, however, dealing with concrete
problems where the logical and the practical views are seen
to be the same; _e.g._, W. Z. Ripley, _Quarterly Journal of
Economics_, Vol. XV, p. 106 (1900), article on "The
Capitalization of Public Service Corporations"; also
article in _Engineering News_, Vol. XXVIII, p. 492
(November, 1892).