How Big Are The Tax Benefits of Debt ?  

Oleh:

Graham, John R.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 5 (2000), page 1901-1942.
Topik: Benefits; studies; debt financing; corporate debt; tax benefits; statistical analysis
Fulltext: p 1901.pdf (244.25KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.3 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

I integrate under firm - specific benefit functions to estimate that the capitalized tax benefit of debt equals 9,7 percent of firm value (or as low as 4,3 percent, net on personal taxes). The typical firm could double tax beenfits by issuing debt until the marginal tax benefit begins to decline. I infer how aggresively a firm uses debt by observing the shape of its tax benefit function. Paradoxically, large, liquird, profitable firms with low expected distress costs use debt conservatively. Product market factors, growth options, low asset collateral and planning for future expenditures lead to conservative debt usage.

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