Examples of capital rationing in the following topics:
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- In The Protestant Ethic and the Spirit of Capitalism, his most famous text, Weber proposed that ascetic Protestantism was one of the major "elective affinities" associated with the rise of capitalism, bureaucracy, and the rational-legal nation-state in the Western world.
- Weber proposed that ascetic Protestantism had an elective affinity with capitalism, bureaucracy, and the rational-legal nation-state in the Western world.
- In contrast, Weber showed that certain types of Protestantism, notably Calvinism, supported worldly activities and the rational pursuit of economic gain.
- Instead of being viewed as morally suspect, greedy, or ambitious, financially successful believers were viewed as being motivated by a highly moral and respectable philosophy, the "spirit of capitalism. " Eventually, the rational roots of this doctrine outgrew their religious origins and became autonomous cultural traits of capitalist society.
- Thus, Weber explained the rise of capitalism by looking at systems of culture and ideas.
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- The cost of obtaining funds in such a manner is known as a company's cost of capital.
- This market situation would be quite attractive from the perspective of a company raising capital; however, such an investment wouldn't make sense for a rational buyer.
- The rational investor will require either a higher return or lower price, which will both result in a higher cost of capital for the company.
- This would not be an attractive market situation for a company looking to raise capital.
- Describe the impact of the SML on determining the cost of capital
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- Max Weber was particularly concerned about the rationalization of society due to the Industrial Revolution and how this change would affect humanity's agency and happiness.
- Weber's understanding of rationalization was three-fold: firstly, as individual cost-benefit calculations; secondly, as the transformation of society into a bureaucratic entity; lastly, and on a much wider scale, as the opposite of perceiving reality through the lens of mystery and magic (disenchantment).
- Since Weber viewed rationalization as the driving force of society and given that bureaucracy was the most rational form of institutional governance, Weber believed bureaucracy would spread until it ruled society.
- Related to rationalization is the process of disenchantment , in which the world is becoming more explained and less mystical, moving from polytheistic religions to monotheistic ones and finally to the Godless science of modernity.
- Compare the similarities and differences between Weber's Rationalization, Marx's Alienation and Durkheim's Solidarity In relation to the Industrial Revolution
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- Sociology came of age in the late nineteenth century, at the same time as capitalism and modernity were taking root.
- The classical period was concerned particularly with modernity and its phenomenological progeny, such as rationalization, secularization, urbanization, and social stratification.
- Max Weber's book The Protestant Ethic and the Spirit of Capitalism is the archetypical representation of the works of economic sociology's classical period .
- The Protestant Ethic and the Spirit of Capitalism is representative of classical economic sociology in that it uses sociological data on religion to explain the economic phenomenon of northern Europe's embrace of capitalism.
- This picture shows the cover to the 1934 edition of Max Weber's The Protestant Work Ethic and the Spirit of Capitalism.
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- The equity, or capital stock (or stock) of a business entity represents the original capital paid into or invested in the business by its founders.
- Firms need to acquire capital from others to operate and grow.
- From a firm's perspective, they must pay for the capital it obtains from others, which is called its cost of capital.
- Such providers are usually rational and prudent preferring safety over risk.
- If an investment's risk increases, capital providers demand higher returns or they will place their capital elsewhere.
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- The capital asset pricing model (CAPM) allows us to price risky securities in order to determine if an investment should be undertaken.
- The capital asset pricing model is a financial model, used to price risky securities, that describes the relationship between risk and expected return.
- Calculate a company's expected rate of return using the Capital Asset Pricing Model (CAPM)
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- Weber identified in bureaucracies a rational-legal authority in which legitimacy is seen as coming from a legal order.
- Accompanying this shift was an increasing democratization and rationalization of culture.
- Weber identified in bureaucracies a rational-legal authority in which legitimacy is seen as coming from a legal order.
- Regarding Western societies, Weber called this increasing rationalization an "iron cage" that trapped individuals in systems based solely on efficiency, rational calculation, and control.
- According to Weber, the shift from old forms of mobility, like kinship, to new forms, like strict, legal rules, was a direct result of the growth of bureaucracy and capitalism.
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- Weber did believe bureaucracy was the most rational form of institutional governance, but because Weber viewed rationalization as the driving force of society, he believed bureaucracy would increase until it ruled society.
- Since a completely rational society was inevitable and bureaucracy was the most rational form of societal management, the iron cage, according to Weber, does not have a solution.
- In addition to the alienation from the results of production, the proletariat is also alienated from each other under capitalism.
- Rather, they had achieved a form of socialism, what Marx called the stage between capitalism and communism.
- Thus, while Marx was highly critical of capitalism, he also recognized its utility in developing the means of production.
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- A real number that is not rational is called irrational.
- The term rational in reference to the set Q refers to the fact that a rational number represents a ratio of two integers.
- In mathematics, the adjective rational often means that the underlying field considered is the field Q of rational numbers.
- Rational polynomial usually, and most correctly, means a polynomial with rational coefficients, also called a "polynomial over the rationals".
- However, rational function does not mean the underlying field is the rational numbers, and a rational algebraic curve is not an algebraic curve with rational coefficients.
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- A rational function is one such that $f(x) = \frac{P(x)}{Q(x)}$, where $Q(x) \neq 0$; the domain of a rational function can be calculated.
- Note that every polynomial function is a rational function with $Q(x) = 1$.
- For a simple example, consider the rational function $y = \frac {1}{x}$.
- Factorizing the numerator and denominator of rational
function helps to identify singularities of algebraic rational functions.
- Graph of a rational function with equation $\frac{(x^2 - 3x -2)}{(x^2 - 4)}$.