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We study the effect of tax policy on stock market returns in the United States, Germany, and the United Kingdom using …
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base erosion and profit shifting (BEPS). We use the introduction of such an interest deductibility restriction in Germany …
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The theoretical literature suggests that when taking tax effects into account, debt ought to be preferable to equity. However, there are no uniform predictions of the size of this tax benefit (tax shield) in comparison to an opposing increasing cost of debt (especially insolvency costs). The...
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