Kubota, Keiichi; Takehara, Hitoshi - In: FinanzArchiv: Public Finance Analysis 63 (2007) 2, pp. 163-185
The paper studies the effects that tax rate changes have on the cost of capital when firms follow target leverage ratios. We show that changes in individual income tax rates are neutral. The focus therefore is on the effects of changes in marginal corporate tax rates. These effects are computed...