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Persistent link: https://www.econbiz.de/10003377163
The tax bias in favour of debt finance under the corporate income tax means that corporate debt ratios exceed the socially optimal level. This creates a rationale for thin-capitalization rules limiting the amount of debt that qualifies for interest deductibility. This paper sets up a model of...
Persistent link: https://www.econbiz.de/10010438191
of increased bank capital in terms of reduced loans could be substantial, there are good reasons to believe that the … between the capitalization of the banking sector and bank loans using panel cointegration models. We study the evolution of … the German economy for the past 60 years. We find no evidence for a negative impact of bank capital on business loans …
Persistent link: https://www.econbiz.de/10009570042
(CAPM) to price assets in different market structures. Second, we use our model to analyze whether when markets are … partially segmented using the local or the global CAPM yields significant errors in the estimation of the cost of capital for a …
Persistent link: https://www.econbiz.de/10009700297
choose their portfolio risk, bank size, and capital holdings. Banks voluntarily hold equity when the buffer effect against … larger, choose riskier portfolios, and have less equity. Binding capital requirements or levies on bank borrowing are shown …
Persistent link: https://www.econbiz.de/10012797734
How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper … finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending …
Persistent link: https://www.econbiz.de/10011958806
Concentrated ownership of large listed companies is widespread throughout the world, and Germany is typical in this …
Persistent link: https://www.econbiz.de/10009781688
We examine evidence for a systematic underperformance of Germany's state-owned banks in the current financial crisis … and study if the bank losses can be traced to the quality of bank governance. For this purpose, we examine the … are then related directly to the magnitude of bank losses in the recent financial crisis. Our data confirms that …
Persistent link: https://www.econbiz.de/10003850179
When companies finance their investment via the international markets for stocks and bonds, relief from domestic personal taxes on dividends and capital gains will not reduce the cost of capital. Some authors have shown that even for small domestic companies whose shares are not traded...
Persistent link: https://www.econbiz.de/10010438475
This paper examines how the effects of dividend taxation on the cost of new equity funds depend on whether or not shareholders can recover their original equity injections without being subject to the dividend tax. We point out the alternative assumptions in the literature on this, and we...
Persistent link: https://www.econbiz.de/10010412740