We derive and present the formula for optimal debt under the assumption that tax shields are discounted at the cost of levered equity, Ke and cash flows are on perpetuity. The formulation is consistent and is derived from basic financial principles. This formulation is valid for non-growing...

We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing...

I identify three sources of risk for the tax shields: two of them associated to the risk of debt and one associated to the operating risk. I present a set of conditions for defining risky debt associated to cash flow and not to accounting earnings. I explain why realization of tax shields for...

This paper empirically examines how debt covenants impact the capital structure choices of firms, by utilizing an exogenous accounting based shock to the distance to covenant violation. We find that, on average, the shock to debt capacity had a positive impact on the debt choices of all treated...

The English version of this article is available at: "http://ssrn.com/abstract=2214674" http://ssrn.com/abstract=2214674.En estas diapositivas se discute la dificultad práctica y conceptual de la búsqueda de una estructura óptima de capital EOC. Se propone un enfoque normativo que llamamos...

La versión española de este artículo se puede encontrar en: "http://ssrn.com/abstract=2214703" http://ssrn.com/abstract=2214703.In these slides we discuss the practical and conceptual difficulty of finding an Optimal Capital Structure. We propose a normative approach we call Implicit...

Modern institutes of the market form new factors of the global economy. Stock exchanges, other institutes of the investment market, financial Internet communications create the integrated pace of world economic system. The companies test direct influence from global information-financial space....

In this paper we report the results from a survey among all publicly listed Nordic firms on their policy decisions concerning their capital structure. We find that more than 60 percent of the companies have rather or relatively flexible debt target, whereas a strict target or no target at all is...

In this note, we present a simple numerical example, with a finite cash flow, to illustrate the concept of the Optimal Capital Structure (OCS). First, we assume that the discount rate for the tax benefits K_TB equals the return to unlevered equity K_U. The cost of debt K_D is a simple linear...

The English version of this paper can be found at 'http://ssrn.com/abstract=1655244' http://ssrn.com/abstract=1655244.Se presenta la derivación de costo de capital bajo la premisa del ahorro de impuestos de riesgo descuento con el costo de capital apalancado. Se demuestra que la formulación es...