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Corporation income taxes and the cost of capital: A revision

dc.creatorKolari J.W.
dc.creatorVélez-Pareja I.
dc.date.accessioned2020-03-26T16:32:56Z
dc.date.available2020-03-26T16:32:56Z
dc.date.issued2012
dc.identifier.citationInnovar; Vol. 22, Núm. 46; pp. 53-70
dc.identifier.issn01215051
dc.identifier.urihttps://hdl.handle.net/20.500.12585/9094
dc.description.abstractThe value of debt tax shields in foundational corporate valuation models by Nobel Laureates Modigliani and Miller (MM) continues to be a controversial issue that is central to our understanding of corporate finance. Rather than discounting debt interest payments using a riskless interest rate or unlevered equity rate, the present paper proposes the use of the levered cost of equity. Assuming no bankruptcy risk and no personal taxes, our revised tax model yields an inverted U-shaped firm value function with an interior optimal capital structure. Analyses are extended to Miller's personal tax extension of MM's tax model. Also, implications to corporate capital structure decisions and previous literature are discussed.eng
dc.format.mediumRecurso electrónico
dc.format.mimetypeapplication/pdf
dc.language.isoeng
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/
dc.sourcehttps://www.scopus.com/inward/record.uri?eid=2-s2.0-84874367463&partnerID=40&md5=319b11142379d1b435712660c5ebb8fa
dc.titleCorporation income taxes and the cost of capital: A revision
dc.title.alternativeImpuesto a la renta corporativa y el costo de capital: Una revisión
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datacite.rightshttp://purl.org/coar/access_right/c_16ec
oaire.resourceTypehttp://purl.org/coar/resource_type/c_6501
oaire.versionhttp://purl.org/coar/version/c_970fb48d4fbd8a85
dc.type.driverinfo:eu-repo/semantics/article
dc.type.hasversioninfo:eu-repo/semantics/publishedVersion
dc.subject.keywordsCapital structure
dc.subject.keywordsFirm valuation
dc.subject.keywordsShare valuation
dc.subject.keywordsValue of tax shields
dc.rights.accessrightsinfo:eu-repo/semantics/restrictedAccess
dc.rights.ccAtribución-NoComercial 4.0 Internacional
dc.identifier.instnameUniversidad Tecnológica de Bolívar
dc.identifier.reponameRepositorio UTB
dc.type.spaArtículo
dc.identifier.orcid6602573876
dc.identifier.orcid6503847935


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