Capital Structure Decision With Corporate Taxes

  • Harold BiermanJr.


Assume that there are corporate taxes (tc = .35) but no investor taxes. Consistent with U.S. tax laws interest gives rise to a tax deduction but dividends on stock do not. Again we assume there are no costs of financial distress.


Capital Structure Financial Distress Common Stock Share Repurchase Convertible Bond 
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Copyright information

© Springer Science+Business Media Dordrecht 2003

Authors and Affiliations

  • Harold BiermanJr.
    • 1
  1. 1.The Johnson Graduate School of ManagementCornell UniversityIthacaUSA

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