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Residual income valuation (RIV; also, residual income model and residual income method, RIM) is an approach to equity valuation that formally accounts for the cost of equity capital. Here, "residual" means in excess of any opportunity costs measured relative to the book value of shareholders' equity ; residual income (RI) is then the income ...
The Solow residual is a number describing empirical productivity growth in an economy from year to year and decade to decade. Robert Solow , the Nobel Memorial Prize in Economic Sciences -winning economist, defined rising productivity as rising output with constant capital and labor input.
The residual is often defined as the growth rate of output not explained by the share-weighted growth rates of the inputs. [ 7 ] : 6 We can use the real process data of the production model in order to show the logic of the growth accounting model and identify possible differences in relation to the productivity model.
Transformation problem: The transformation problem is the problem specific to Marxist economics, and not to economics in general, of finding a general rule by which to transform the values of commodities based on socially necessary labour time into the competitive prices of the marketplace. The essential difficulty is how to reconcile profit in ...
Its use can be traced back to the late 19th century and Francis Amasa Walker's 'residual claimant theory', [3] which argues that in the distribution of wealth among profits, rent, interest and wages, the laborer is the residual claimant and wages the variable residual share of wealth, thereby going against the established view of profits as the ...
The problem arises because there is a division between the ownership and control of the company, [10] as a result of the residual loss. In such case, traditional mechanisms of corporate governance such as shareholder activism and proxy contests may be less effective due to the fragmented nature of ownership.
In economics, economic rent is any payment to the owner of a factor of production in excess of the costs needed to bring that factor into production. [1] In classical economics, economic rent is any payment made (including imputed value) or benefit received for non-produced inputs such as location and for assets formed by creating official privilege over natural opportunities (e.g., patents).
The residual is the difference between the observed value and the estimated value of the quantity of interest (for example, a sample mean). The distinction is most important in regression analysis , where the concepts are sometimes called the regression errors and regression residuals and where they lead to the concept of studentized residuals .