We derive and present the formula for optimal debt under the assumption that tax shields are discounted at the cost of levered equity, Ke and cash flows are on perpetuity. The formulation is consistent and is derived from basic financial principles. This formulation is valid for non-growing...

We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing...

In this note, we present a simple numerical example, with a finite cash flow, to illustrate the concept of the Optimal Capital Structure (OCS). First, we assume that the discount rate for the tax benefits K_TB equals the return to unlevered equity K_U. The cost of debt K_D is a simple linear...

The English version of this paper can be found at 'http://ssrn.com/abstract=1655244' http://ssrn.com/abstract=1655244.Se presenta la derivación de costo de capital bajo la premisa del ahorro de impuestos de riesgo descuento con el costo de capital apalancado. Se demuestra que la formulación es...