The effect of corporate tax avoidance on the cost of equity

By Beng Wee Goh, Jimmy Lee, C. Lim, Terry Shevlin. 2013

367 citations recorded by the source corpus.

ABSTRACT: Based on Lambert, Leuz, and Verrecchia's (2007) derivation of the cost of equity capital in terms of expected cash flows, we generate a testable hypothesis that relates tax avoidance to a...

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/5550e771147151c696444b9589a19c6f1a01a009

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In Accounting

1. Stephen J. Lusch
2. Katharine D. Drake
3. James Stekelberg

In Economics and Econometrics

1. Stephen J. Lusch
2. Katharine D. Drake
3. James Stekelberg

Citations in the corpus

• Does Tax Risk Affect Investor Valuation of Tax Avoidance? (2017, background): “Although recent literature focuses on variation in cash taxes paid (e.g., Guenther et al., 2017; McGuire et al., 2013), survey evidence provided by Graham, Hanlon, Shevlin, and Shroff (2014) suggests that firms and managers focus more on GAAP ETRs and low volatility of GAAP ETRs, than they do on the”
• Tax Avoidance and Ex Ante Cost of Capital (2017, neutral): “In contrast, Goh et al. (2013) examine how investors perceive “less aggressive and less risky” forms of tax avoidance and report that higher book-tax differences (BTDs), higher permanent BTDs, and lower long-run cash ETRs are associated with lower ex ante cost of capital.4 We distinguish our study…”