• * * * DISCOUNTING THE FUTURE.
The bonus involved in the issue of new Ordinary shares of the Columbia Graphophone Company to shareholders is a sub' stantial one, in the sense that the new shares are offered at f.1 (Continued on page 88Q.) each- in the ratio of one new share for every five at present held, and ttas at current market prices is equivalent to a bonus of a little over Ms. a-shire: 'Nevertheless, I cannot-help thinking that the extraordinarily, high price of Columbia Graphophone shares constitutes an example of the many instances where current prices mark a heavy discounting of future possibilities. Thus, on the basis of the last dividend the new shares are being offered at a:price representing a yield of less than 21 per cent., while the old shares give actually a yield on the same basis of less than 1 per cent. It is, of course, true that'a much larger dividend could have been paid out of last year's profits, but then in companies which cater for :demands which may, or may not, be of a permanent character;:it is obviously necessary to create large reserves and pro-Vide for big carry forwards each year.
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