Abstract
Corporate taxes tend to drive a firm to maximize the use of debt. Consideration of investor taxes results in some shift to the use of common equity capital, but the existence of a significant part of the investor capital market that does not pay taxes again results in a bias for the use of debt.
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References
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© 2003 Springer Science+Business Media Dordrecht
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Bierman, H. (2003). Capital Structure Decision With Costs of Financial Distress. In: The Capital Structure Decision. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-1037-6_5
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DOI: https://doi.org/10.1007/978-1-4615-1037-6_5
Publisher Name: Springer, Boston, MA
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Online ISBN: 978-1-4615-1037-6
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