Taxation and the Cost of Capital: The "Old" View, the "New" View and Another View / Hans-Werner Sinn.

Format:

Book

Author/Creator:

Sinn, Hans-Werner.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3501.

NBER working paper series no. w3501

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Taxation and the Cost of Capital

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1990.

Summary:

This paper is a critical survey of the recent literature on the tax effects on corporate finance and investment decisions. It corrects a common misinterpretation of the "new" view, emphasizes the cushion effect of financial optimization, dismisses the view that optimizing firms behave as if they maximized their cost of finance, studies the role of immature firms, questions the alleged support of the old view by the occurrence of share repurchases, comments on a potential US budget compromise, and suggests the idea of a Political Miller Equilibrium.

Notes:

Print version record

October 1990.