ABSTRACT
A capitalist enterprise is founded in order to make a profit, and its creation is undertaken on the assumption that it will achieve a profit; in normal circumstances, the prevailing average rate of profit. The risk premium is simply a result of the fact that the supply of free money capital, which the founders of companies are seeking, which is available for investment in shares, will normally be smaller, other things being equal, than that for particularly safe, fixed interest investments. The shareholder is not an industrial entrepreneur. When the joint-stock company is not the dominant form, and the negotiability of shares is not fully developed, dividends will include an element of entrepreneurial profit as well as interest. The turnover of shares is not a turnover of capital, but a sale and purchase of titles to income. The difference between the value of the capital in actual use and the share capital can increase during the lifetime of a corporation.
