search query: @indexterm capital structure of companies / total: 353
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| Author: | Graham, J.R. Tucker, A.L. |
| Title: | Tax shelters and corporate debt policy |
| Journal: | Journal of Financial Economics
2006 : SEP, VOL. 81:3, p. 563-594 |
| Index terms: | capital structure of companies debt taxation tax evasion |
| Language: | eng |
| Abstract: | This study gathers a unique sample of 44 tax shelter cases to investigate the magnitude of tax shelter activity and whether participating in a shelter is related to corporate debt policy. The average annual deduction produced by the shelters in the sample is very large, equaling approximately nine percent of asset value. These deductions are more than three times as large as interest deductions for comparable companies. The companies in the sample use less debt when they enlarge in tax sheltering. Compared to companies with similar pre-shelter debt ratios, the debt ratios of companies engaged in tax shelters fall by about 8%. |
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