Resource title

S-based taxation under default risk

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Resource description

This article studies the characteristics of a S-based tax system under default risk. In particular we show that its neutrality properties depend on whether debt is protected or unprotected. In the former case, this system is neutral. In the latter case, where default timing is optimally chosen by shareholders, the S-based system is neutral with respect to real decisions only if the firm?s and the lender?s tax rate are equal. However, the shareholders? decision to default is always distorted.

Resource author

Paolo M. Panteghini

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18960

Resource license

Adapt according to the presented license agreement and reference the original author.