Interest Rates, Taxes and Corporate Financial Policies
This paper investigates the combined effect of nominal interest rates and taxes on the use and maturity structure of corporate debt. The net tax gain from use of corporate debt is proportional to nominal interest rates, so that behavioral responses should be larger when interest rates are higher. For similar reasons, firms should shift towards more long–term debt as long–term rates rise relative to short–term rates. Our paper presents evidence consistent with both predictions, using corporate and personal tax return data from the U.S. Statistics of Income (SOI).
Volume (Year): 60 (2007)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: 529 14th Street NW Suite 750, Washington DC 20045|
Web page: https://www.ntanet.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alan J. Auerbach, 1979.
"Wealth Maximization and the Cost of Capital,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 93(3), pages 433-446.
When requesting a correction, please mention this item's handle: RePEc:ntj:journl:v:60:y:2007:i:1:p:65-84. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (A. Sinan Unur)
If references are entirely missing, you can add them using this form.