tax benefit of debt (net and gross of investor taxes) and the debt ratio. A 10% increase in the net (gross) marginal tax … also be identified in a partial adjustment model. -- Debt ; capital structure ; marginal tax rate ; corporate taxes … simulate marginal tax rates, we find a statistically and economically significant positive relationship between the marginal …

firms rely heavily on equity financing, even though benefits associated with debt (like tax shields) appear to be high and …. Debt, however, has an adverse effect on the enforceability of these arrangements because too much debt increases the firm … analysis provides an explanation for why some firms only use little debt financing. Predictions made by our theory are in line …

such differential taxation on the debt ratio of firms. We exploit a 2009 tax reform in Germany as a quasi-experiment, which … leverage when the tax rate on interest income decreases, albeit to a small degree. -- Income taxation ; capital taxation …Tax competition for the mobile factor capital has led to a trend in many countries to levy lower taxes on interest …

-looking market-based risk measures provide significant explanatory power in predicting net leverage changes in excess of accounting …' magnitudes of, and propensity for, net leverage increases. Firms with larger predicted leverage increases outperform firms with …, leverage, and distress risk puzzles, firms with lower predicted leverage increases are riskier but earn lower abnormal returns …

We provide new estimates of the wage costs of firms' debt. Our empirical approach exploits within-firm geographical … sample of public firms. We find that, following an increase in firm leverage, workers with higher unemployment costs … that a 10 percentage point increase in leverage increases wage compensation for the median worker by 1.9% and total firm …