The Corporate Cost of Capital in Japan and the U.S.: A Comparison / Albert Ando, Alan J. Auerbach.

Format:

Book

Author/Creator:

Ando, Albert.

Contributor:

National Bureau of Economic Research.

Auerbach, Alan J.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1762.

NBER working paper series no. w1762

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Corporate Cost of Capital in Japan and the U.S

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1985.

Summary:

This paper presents evidence about the coats of corporate capital in Japan and the US, for a sample of large companies, and evaluates a variety of hypotheses about why the cost might be lower in Japan.We find that the before-tax return to capital in Japan appears slightly lower than in the U.S. when corrected book measures of earnings are used, but that this result would be reversed if market returns to Japanese equity were used in place of corrected earningsto measure the cost of equity.To what ever extent the cost of capital may actually be lower in Japan, we show that this is unlikely to be due either to a lower overall corporate tax burden or the particular tax advantages of corporate borrowing.

Notes:

Print version record

October 1985.