search query: @author Rashid, M. / total: 3
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| Author: | Rashid, M. Amoako-Adu, B. |
| Title: | The cost of capital under conditions of personal taxes and inflation |
| Journal: | Journal of Business Finance and Accounting
1995 : OCT, VOL. 22:7, p. 1049-1062 |
| Index terms: | CAPITAL TAXATION INFLATION |
| Language: | eng |
| Abstract: | In this paper, the authors derive a firm's weighted average cost of capital with personal taxation and inflation. In different scenarios of tax regime and inflation, it is shown that the cost of capital of this paper reduces to various expressions which are consistent with the existing valuation models. The authors show that personal tax leads to a higher cost of capital, and inflation raises the nominal cost of capital, but the increase is less than 100 percent. In addition, the authors extend the relationship between leveraged beta and financial leverage of Hamada (1972) to include personal taxes and inflation. |
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