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Thin Capitalization Rules and Entrepreneurial Capital Structure Decisions

Maßbaum, Alexandra; Sureth, Caren - In: BuR - Business Research 2 (2009) 2, pp. 147-169

Tax planners often choose debt over equity financing. As this has led to increased corporate debt financing, many countries have introduced thin capitalization rules to secure their tax revenues. In a general capital structure model we analyze if thin capitalization rules affect dividend and...

Persistent link: https://www.econbiz.de/10010421339

Corporate debt, hybrid securities and the effective tax rate

Panteghini, Paolo M. - 2008

In this article we use contingent-claim analysis to calculate the effective tax rate (ETR) under corporate debt finance. In particular, we deal with both pure debt and two of the most well-known hybrid securities, i.e., convertible, and reverse convertible bonds. We show that: 1) effective...

Persistent link: https://www.econbiz.de/10010276143

Disagreement and Flexibility: A Theory of Optimal Security Issuance and Capital Structure

Boot, Arnoud W.A.; Thakor, Anjan V. - 2003

ofthis theory of capital structure evolution is that optimal capital structure is essentiallydynamic, and depends on the firm …’s stock price, implying that firms issue equity when stockprices are high and debt when stock prices are low. The theory … testablepredictions. Moreover, the theory can rationalize the use of debt in the absence of taxes,agency costs or signaling considerations. …

Persistent link: https://www.econbiz.de/10010324789

Managerial incentives and the efficiency of capital structure

Hughes, Joseph P.; Lang, William W.; Moon, Choon-Geol; … - 2001

We extend the literature on the effects of managerial entrenchment on capital structure to consider how safety-net subsidies and financial distress costs interact with managerial incentives to influence capital structure in U.S. commercial banking. Using cross-sectional data on publicly traded,...

Persistent link: https://www.econbiz.de/10010318364

Company Financing, Capital Structure, and Ownership: A Survey, and Implications for Developing Economies

Prasad, Sanjiva; Green, Christopher J.; Murinde, Victor - 2001

attempts to reconcile competing theories of capital structure and appraises recent models which use agency theory and …

Persistent link: https://www.econbiz.de/10011689896

A growth oriented dual income tax

Keuschnigg, Christian; Dietz, Martin D. - 2005

demonstrates the neutrality properties of the reform with respect to investment, firm financial decisions and organizational choice …. Tax rates are chosen to prevent income shifting from labor to capital income. The reform decisively strengthens investment …

Persistent link: https://www.econbiz.de/10010271071

Investment, protection, ownership, and the cost of capital

Himmelberg, Charles P.; Hubbard, R. Glenn; Love, Inessa - 2002

We investigate the cost of capital in a model with an agency conflict between inside managers and outside shareholders. Inside ownership reflects the classic tradeoff between incentives and risk diversification, and the severity of agency costs depends on a parameter representing investor...

Persistent link: https://www.econbiz.de/10011506547

Corporate credit and leverage in the EU: Recent evolution, main drivers and financial stability implications

Beck, Thorsten; Peltonen, Tuomo; Perotti, Enrico C.; … - 2023

This report presents a long-term view of the evolution of financing of EU non-financial corporations (NFCs) in recent decades. It finds a decline in NFC leverage since at least 2008, and across countries, size categories and industries. It also documents a growing role of non-bank financial...

Persistent link: https://www.econbiz.de/10014327946

Leasing by small enterprises

Neuberger, Doris; Räthke-Döppner, Solvig - 2012

Using internal data of a leasing company in Germany, we examine the determinants of the probability and use of leasing by small firms. We find that small and young firms are likely to be constrained on the leasing market but use leasing to increase their debt capacity. Beyond contract- and...

Persistent link: https://www.econbiz.de/10010319296

Corporate debt maturity choice in transition financial markets

Stephan, Andreas; Talavera, Oleksandr; Tsapin, Andriy - 2008

This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the...

Persistent link: https://www.econbiz.de/10010265007