How Big are the Tax Benefits of Debt

By J. Graham. 2000

1,639 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/e3cdcd55b1ba0f25bc23315f9db61f40f9837e0c

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In Accounting

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Citations in the corpus

Microprudential Regulation in a Dynamic Model of Banking (2014, result): “For this reason we choose τ+ = 15%, which is close to the values determined by Graham (2000) for the marginal tax rate. The marginal tax rate for negative income is τ− = 0 to allow for convexity in the corporate tax schedule. Furthermore, the proportional bankruptcy cost is η = 0.10, This is a value”
Can the Trade-off Theory Explain Debt Structure? (2007, neutral): “The tax rate estimates in Graham (2000) suggest that most firms would be roughly indifferent to an upward leveraged recapitalization.”
Financially Constrained Stock Returns (2009, neutral): “Graham (2000) report that cash retentions are tax-disadvantaged because tax rates generally exceed tax rates on interest income for bondholders.”
Are Firms Underleveraged? An Examination of the Effect of Leverage on Default Probabilities (2005, positive): “Graham and Rogers (2002) and Leland (1998) show that risk management activities impact firms’ debt choice and can cause a firm engaged in risk management to respond differently to a change in its fundamental risk.”
Thin Capitalization Rules and Multinational Firm Capital Structure (2014, neutral): “This provides firms with an incentive to finance their operations with debt rather than equity, especially in high tax countries (Graham, 1996, 2000; MacKie-Mason, 1990).”
Optimal Priority Structure, Capital Structure, and Investment (2012, neutral): “This result helps explain the empirical finding in Graham(2000), who states that firms have overly conservative capital structures, even when there is a sizable net tax advantage to debt financing.”
Customer-Supplier Relationships and Corporate Tax Avoidance (2017, background): “Higher debt tax shields can reduce marginal tax rates and the incentives for incremental tax planning (Graham, 1996a; Graham, 1996b; Graham, 2000).”
Institutions and corporate capital structure in the MENA region (2016, positive): “Altman's Z-score is a measure of the ex ante probability of distress (Graham, 2000), with higher values indicating a lower probability of distress.”
Financing of corporations (2003, neutral): “Graham (2000) examines the interest-rate spread between corporate bonds and tax-exempt municipal bonds to estimate the tax rate paid by marginal investors in corporate debt.”
Financial Expertise of Directors (2008, background): “Graham (2000) finds, for example, that firms tend to use debt too conservatively relative to its tax benefits.”