Leverage effect and tax effect

For independent variable others, manufacture companies size and firms age have negative and significant.

Leverage effect meaning

Open Access. A hypothesis test used are coefficient determination test R Square , F test, and t-test. Reddit Abstract Finance theory has long viewed corporate income taxes as a potentially important determinant of corporate financing decisions and capital structures. When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp Therefore should add another variable closely related to tax avoidance and cost of debt. See general information about how to correct material in RePEc. But among real estate firms, tax status appears to play a much weaker role. For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Bibliothek.

Reddit Abstract Finance theory has long viewed corporate income taxes as a potentially important determinant of corporate financing decisions and capital structures. A hypothesis test used are coefficient determination test R SquareF test, and t-test.

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leverage effect garch

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This enables them to measure the relative tax benefits of debt with greater precision while controlling for important nontax characteristics that affect debt usage.

Our findings also depend on real estate characteristics—most notably, only residential real estate firms demonstrated differences that are consistent with the tax hypothesis. But finance academics have been unable to provide convincing empirical evidence of a material effect of taxes on corporate leverage, in part because of difficulties in constructing an effective proxy for marginal corporate tax rates, and hence for the tax benefits of debt, for large samples of individual companies.

Leverage effect on goodwill formula

Taxable firms have significantly more leverage only after , when restrictions on REITs were removed through new regulations that made their operations much more like those of taxable real estate firms. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation. Our findings also depend on real estate characteristics—most notably, only residential real estate firms demonstrated differences that are consistent with the tax hypothesis. This enables them to measure the relative tax benefits of debt with greater precision while controlling for important nontax characteristics that affect debt usage. Therefore should add another variable closely related to tax avoidance and cost of debt. However, Leverage has positive and significant effect on cost of debt in companies. See general information about how to correct material in RePEc.
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Financial Leverage and Corporate Taxation: Evidence from German Corporate Tax Return Data