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Essay's paper info
Topic: Book Reports
Number of pages / Number of words: 8 / 1974
Essay's paper body

They were only able to sell stock valued at $65 million for $31 million before 1885, necessitating the borrowing of $35 million from the government in 1884/85. It is evident ex ante that private investors were not willing to invest in the railway even with the subsidies.

2. A return of 3% would not have induced private investment since the opportunity cost of investment (the best alternative investment options) was about 6% on bonds in this period and probably closer to 10% on this railway given the risk factor...


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A return of 3% would not have induced private investment since the opportunity cost of investment (the best alternative investment options) was about 6% on bonds in this period and probably closer to 10% on this railway given the risk factor.

3. Peter George calculated the subsidies necessary to give the CPR a 6% or 10% return on the capital expenditure of initial construction and of $50 million more from 1886 to 1896...


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