A theory of the firm's cost of capital: how debt affects the firm's risk, value, tax rate, and the government's tax claim
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| Main Authors: | , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Singapore [u.a.]
World Scientific
2007
|
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Item Description: | Literaturverz. S. 85 - 88 |
| Physical Description: | XIV, 88 S. graph. Darst. |
| ISBN: | 9812569499 9789812569493 |
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MARC
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| 245 | 1 | 0 | |a A theory of the firm's cost of capital |b how debt affects the firm's risk, value, tax rate, and the government's tax claim |c Ramesh K. S. Rao, Eric C. Stevens |
| 264 | 1 | |a Singapore [u.a.] |b World Scientific |c 2007 | |
| 300 | |a XIV, 88 S. |b graph. Darst. | ||
| 336 | |b txt |2 rdacontent | ||
| 337 | |b n |2 rdamedia | ||
| 338 | |b nc |2 rdacarrier | ||
| 500 | |a Literaturverz. S. 85 - 88 | ||
| 650 | 4 | |a Corporations |x Finance | |
| 650 | 4 | |a Capital costs | |
| 650 | 4 | |a Corporate debt | |
| 650 | 4 | |a Capital assets pricing model | |
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Record in the Search Index
| _version_ | 1804139186939232256 |
|---|---|
| adam_text | Contents
Preface v
List of Figures xi
List of Tables xiii
I. Introduction 1
II. Model Setting 5
III. Distributional Assumptions 19
IV. Model Solution Procedure 2.3
V. Discussion of Results 33
VI. Extension to s x s States -l-i
VII. Numerical Illustration -47
VIII. Conclusion 7
Appendix A 6.3
Appendix B 77
References 85
ix
List of Figures
Figure Page
1. Output apportionment diagrams for the tax
shields and claims. 10
2. Impact of an incremental debt dollar on levered
firm risk and value. 38
3. Par yield (r) and the cost of debt (hp) for the
numerical examples. 50
4. Risk of the tax shields for the numerical 52
examples.
5. Cost of equity, kg, cost of debt, ho, and the
WA CC for the numerical examples. 53
6. WA CC from the numerical examples, and
WACCcomputed using r(l - T), r(l - MTR)
as proxies for kjj. 54
7. Expected post-financing MTR
for the numerical examples. 55
xi
List of Tables
Table page
1. Tax shield use, tax status, and financial solvency
for different levels of output X and of debt D in
relation to assets A. 8
2. Output apportionment for tax shields and claims. 9
3. Pricing cases for the 2x2 model. 25
4. Illustration of valuation of the depreciation tax
shield. 28
5. Debt pricing for the 2x2 model. 30
6. Relative magnitude of risks of the debt tax
shield, the unlevered firm and the debt, for the 2x2
model with 9X 0. 31
7. Value of the levered firm and the marginal
value impact of debt. 31
8. Numerical illustration: parameters assumed. 48
A.I. Risk of the tax shields and claims for each
pricing case (Table 3), computed using
Equation (12) and the output apportionment
formulas (Table 2). 70
A.2. Post-financing expected MTR
computed as the expected value of the
applicable tax rate. 76
xiii
xiv A Theory of the Firm s Cost of Capital
B.I. Results for the 2x2 example, for seven
debt levels. 78
B.2. Results for the 5x5 example, for seven
debt levels. 81
|
| any_adam_object | 1 |
| author | Rao, Ramesh K. Stevens, Eric C. |
| author_facet | Rao, Ramesh K. Stevens, Eric C. |
| author_role | aut aut |
| author_sort | Rao, Ramesh K. |
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| building | Verbundindex |
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| dewey-full | 338.6/04101 |
| dewey-hundreds | 300 - Social sciences |
| dewey-ones | 338 - Production |
| dewey-raw | 338.6/04101 |
| dewey-search | 338.6/04101 |
| dewey-sort | 3338.6 44101 |
| dewey-tens | 330 - Economics |
| discipline | Wirtschaftswissenschaften |
| format | Book |
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| id | DE-604.BV035545089 |
| illustrated | Illustrated |
| indexdate | 2024-07-09T21:40:05Z |
| institution | BVB |
| isbn | 9812569499 9789812569493 |
| language | English |
| lccn | 2006052555 |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-017601081 |
| oclc_num | 76481588 |
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| owner | DE-355 DE-BY-UBR DE-188 |
| owner_facet | DE-355 DE-BY-UBR DE-188 |
| physical | XIV, 88 S. graph. Darst. |
| publishDate | 2007 |
| publishDateSearch | 2007 |
| publishDateSort | 2007 |
| publisher | World Scientific |
| record_format | marc |
| spelling | Rao, Ramesh K. Verfasser aut A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim Ramesh K. S. Rao, Eric C. Stevens Singapore [u.a.] World Scientific 2007 XIV, 88 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier Literaturverz. S. 85 - 88 Corporations Finance Capital costs Corporate debt Capital assets pricing model Financial leverage Leverage-Effekt (DE-588)4233251-5 gnd rswk-swf Finanzierungstheorie (DE-588)4154418-3 gnd rswk-swf Capital-Asset-Pricing-Modell (DE-588)4121078-5 gnd rswk-swf Unternehmen (DE-588)4061963-1 gnd rswk-swf Kapitalkosten (DE-588)4135348-1 gnd rswk-swf Unternehmen (DE-588)4061963-1 s Kapitalkosten (DE-588)4135348-1 s Leverage-Effekt (DE-588)4233251-5 s Capital-Asset-Pricing-Modell (DE-588)4121078-5 s DE-604 Finanzierungstheorie (DE-588)4154418-3 s DE-188 Stevens, Eric C. Verfasser aut HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=017601081&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis |
| spellingShingle | Rao, Ramesh K. Stevens, Eric C. A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim Corporations Finance Capital costs Corporate debt Capital assets pricing model Financial leverage Leverage-Effekt (DE-588)4233251-5 gnd Finanzierungstheorie (DE-588)4154418-3 gnd Capital-Asset-Pricing-Modell (DE-588)4121078-5 gnd Unternehmen (DE-588)4061963-1 gnd Kapitalkosten (DE-588)4135348-1 gnd |
| subject_GND | (DE-588)4233251-5 (DE-588)4154418-3 (DE-588)4121078-5 (DE-588)4061963-1 (DE-588)4135348-1 |
| title | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim |
| title_auth | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim |
| title_exact_search | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim |
| title_full | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim Ramesh K. S. Rao, Eric C. Stevens |
| title_fullStr | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim Ramesh K. S. Rao, Eric C. Stevens |
| title_full_unstemmed | A theory of the firm's cost of capital how debt affects the firm's risk, value, tax rate, and the government's tax claim Ramesh K. S. Rao, Eric C. Stevens |
| title_short | A theory of the firm's cost of capital |
| title_sort | a theory of the firm s cost of capital how debt affects the firm s risk value tax rate and the government s tax claim |
| title_sub | how debt affects the firm's risk, value, tax rate, and the government's tax claim |
| topic | Corporations Finance Capital costs Corporate debt Capital assets pricing model Financial leverage Leverage-Effekt (DE-588)4233251-5 gnd Finanzierungstheorie (DE-588)4154418-3 gnd Capital-Asset-Pricing-Modell (DE-588)4121078-5 gnd Unternehmen (DE-588)4061963-1 gnd Kapitalkosten (DE-588)4135348-1 gnd |
| topic_facet | Corporations Finance Capital costs Corporate debt Capital assets pricing model Financial leverage Leverage-Effekt Finanzierungstheorie Capital-Asset-Pricing-Modell Unternehmen Kapitalkosten |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=017601081&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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