Government Debt and Private Leverage: An Extension of the Miller Theorem / Robert L. McDonald.

Format:

Book

Author/Creator:

McDonald, Robert L.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w0965.

NBER working paper series no. w0965

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Government Debt and Private Leverage

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1982.

Summary:

This paper shows how government financing decisions can influence the corporate decision to use debt or equity finance. In particular, it is shown that an increase in the stock of taxable government debt reduces the equilibrium quantity of corporate debt, and that an increase in the stock of tax-free government debt reduces the equilibrium quantity of corporate equity. The effects of inflation rate and tax rate changes are also considered.

Notes:

Print version record

August 1982.