search query: @author Ryan, J. / total: 2
reference: 2 / 2
« previous | next »
| Author: | Walsh, E. J. Ryan, J. |
| Title: | Agency and tax explanations of security issuance decisions |
| Journal: | Journal of Business Finance and Accounting
1997 : SEP, VOL. 24:7-8, p. 943-961 |
| Index terms: | SECURITIES FINANCING DECISION MAKING AGENCIES TAXATION |
| Language: | eng |
| Abstract: | This paper examines the impact of tax and agency considerations on the decision to issue debt or equity. A sample of UK companies is used to since the UK tax system confers a minimal tax advantage to debt if the financial and fiscal system are considered in an entirely domestic context. However if one incorporates opportunities to trade and issue securities in foreign markets, it is possible to identify tax arbitrage strategies which are available to corporations but cannot be replicated by individual investors. This observation results in new types of debt tax shield which will result in a corner solution. The paper then introduces the agency costs of debt and the possibility of non-debt tax shields to create a capital structure decision which is not entirely tax-driven. |
« previous | next »
SCIMA