Valuation of The Debt Tax Shield  

Oleh:

Nissim, Doron ; Kemsley, Deen

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 57 no. 5 (2002), page 2045-2074.
Topik: valuation; studies; regression analysis; profitability; corporate profits; corporate taxes; tac benefits
Fulltext: p 2045.pdf (161.84KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

In this study uses cross - sectional regressions to estimate the value of the debt tax shield. Recognizing that debt is correlated with the value of operations along non tax dimensions, the paper estimates reverse regressions in which it regresses future profitability on firm value and debt rather than regressing firm value on debt and profitability. Reversing the regressions mitigates bias and facilitates the use of market information to control for differences in risk and expected growth. Our estimated value for the debt tax shield is approximately 40% (10%) of debt balances (firm value), net of the personal tax disadvantage of debt.

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