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Subsidized loan financing and its impact on the cost of capital and levered firm value. A non-technical reply to "Adjustment of the WACC with subsi...
Ibragimov, Rauf; Velez-Pareja, Ignacio - MASTER CONSULTORES - 2008
to lower leverage. In this note we show that the levered firm value with the loan provided at a rate below market rate is …
Persistent link: https://www.econbiz.de/10010762962
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Subsidized loan financing and its impact on the cost of capital and levered firm value
Ibragimov, Rauf; Velez-Pareja, Ignacio - MASTER CONSULTORES - 2007
to lower leverage.In this note we show that the levered firm value with the loan provided at a rate below market rate is …
Persistent link: https://www.econbiz.de/10010762976
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Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes: the N-Period Case
Velez-Pareja, Ignacio; Tham, Joseph; Fernandez, Viviana - EconWPA - 2005
In the Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates value in the presence of taxes through the tax shield. In some cases,...
Persistent link: https://www.econbiz.de/10005134868
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Financing and Valuation of a Marginal Project by a Firm Facing Various Tax Rates
Pierru, Axel - In: Frontiers in Finance and Economics 5 (2008) 2, pp. 56-71
Persistent link: https://www.econbiz.de/10004998263
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The value of tax shields IS equal to the present value of tax shields
Cooper, Ian A.; Nyborg, Kjell G. - Institutt for foretaksøkonomi, Norges Handelshøyskole … - 2005
Miller and Modigliani leverage policies. …
Persistent link: https://www.econbiz.de/10005645033
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Tax-Adjusted Discount Rates: A General Formula under Constant Leverage Ratios
MOLNAR, Peter; NYBORG, Kjell G.
Cooper and Nyborg (2008) derive a tax-adjusted discount rate formula under a constant proportion leverage policy …
Persistent link: https://www.econbiz.de/10010550285
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Tax-Adjusted Discount Rates: A General Formula under Constant Leverage Ratios
Molnár, Peter; Nyborg, Kjell G - C.E.P.R. Discussion Papers - 2011
Cooper and Nyborg (2008) derive a tax-adjusted discount rate formula under a constant proportion leverage policy …
Persistent link: https://www.econbiz.de/10008915809
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The corporate debt market: A firm-level panel study for India
Guha-Khasnobis, Basudeb; Kar, Saibal - 2006
Traditionally, firms in India have shown a low preference towards debt financing, despite its advantages. Using panel data from 450 firms during 1992-93 and 2003-04, we attempt to identify factors which could explain the pattern of financing of manufacturing firms in India and the key...
Persistent link: https://www.econbiz.de/10010331078
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Different measures, different trends: Contradictions in macro and micro level growth measures
Juhász, Péter; Váradi, Kata; Száz, János; … - In: Journal of Contemporary Economic and Business Issues 4 (2017) 1, pp. 21-39
When focusing on business performance of a country, industry or an individual firm the performance of companies may be tracked using various measures. By simulating the behaviour of a simple firm, our model underlines that the choice of measurement unit determines what distortions we will face,...
Persistent link: https://www.econbiz.de/10011984740
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Leverage and risk-taking in a dynamic model
Berg, Tobias; Heider, Florian - 2024
This paper examines the dynamic relationship between firm leverage and risktaking. We embed the traditional agency … problem of asset substitution within a multi-period model, revealing a U-shaped relationship between leverage and risktaking …, evident in data from both the U.S. and Europe. Firms with medium leverage avoid risk to preserve the option of issuing safe …
Persistent link: https://www.econbiz.de/10014633279