Resource title

Taxes and the efficiency costs of capital distortions

Resource image

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Resource description

Tax neutrality towards alternative financing instruments for corporate investment is a ubiquitous demand in the political debate. At the same time, the literature is surprisingly silent about the magnitude of possible efficiency costs of a departure from tax neutrality. Against this background, the present paper discusses the theory of capital structure and provides backof-the-envelope calculations of the possible efficiency cost of a tax distortion of the debtequity decision.

Resource author

Alfons J. Weichenrieder, Tina Klautke

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26476

Resource license

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