The Cost of Debt

By Jules H. van Binsbergen, John R. Graham, Jie-An Yang. 2010

342 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/6c1a1f6510e0d29e84b4c58504397240a78261dd

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In Accounting

In Strategy and Management

Citations in the corpus

As Certain as Debt and Taxes: Estimating the Tax Sensitivity of Leverage from State Tax Changes (2015, positive): “In the U.S., a popular exogenous shock is the Tax Reform Act of 1986 (see Gordon and MacKie-Mason (1991), Givoly et al. (1992), and van Binsbergen, Graham, and Yang (2010)).”
Uncertainty Shocks, Asset Supply and Pricing over the Business Cycle (2018, positive): “In addition to owning the firm, (6)Binsbergen et al. (2010) estimate the convexity of a reduced-form marginal cost function using exogenous variation in tax benefits.”
Corporate Governance and Capital Structure Dynamics (2012, positive): “Finally, our research relates to the recent papers of van Binsbergen, Graham, and Yang (2010) and Korteweg (2010), who provide empirical estimates of the costs of debt as perceived by the agent optimizing financing decisions.”
Credit Risk and Disaster Risk (2013, neutral): “Maximizing equity value yields the first-order conditions for optimal debt choices: χ− 1 χ Et ( (1− xt+1)Mt+1 ( 1−H ( εt+1 ))) = (1− θ)Et ( Mt+1ε ∗ t+1h ( εt+1 ) (1− xt+1) ) , (14) χ− 1 χ Et ( x̃t+1(b )Mt+1 ( 1−H ( εt+1) ))) = (1− θ)Et ( Mt+1ε ∗ t+1h ( εt+1 ) x̃t+1(b ′) ) .”
Taxes and Corporate Policies: Evidence from a Quasi Natural Experiment: Taxes and Corporate Policies (2015, neutral): “7% of firm value, while van Binsbergen et al. (2010) and Korteweg (2010) estimate a net benefit to debt of 3.”
The Mystery of Zero-Leverage Firms (2013, background): “…Ratio of the amount of interest required to make the firm marginal tax rate slope downward to the actual interest expense (Graham, 2000, and van Binsbergen, Graham, and Yang, 2010) Log(Size) Natural logarithm of book assets adjusted to 2000 dollars log(ATt × CPI2000/CPIt) Market Leverage…”
A Resolution of the Distress Risk and Leverage Puzzles in the Cross Section of Stock Returns (2010, methodology): “To account for this, we incorporate the unlevered tax rates used in Graham (2000) and updated in Binsbergen, Graham, and Yang (2008) as measures of the potential tax benefits of leverage to individual firms.8 These estimates are lagged in our tests as described above for accounting data.”
The expected cost of default (2016, positive): “Using the marginal tax benefit estimates of Graham (2000), van Binsbergen, Graham, and Yang (2010) estimate firm-specific costs of debt under the assumption that firms are optimally levered.”