Discussion of Results

Ramesh K S Rao and Eric C Stevens
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Ramesh K S Rao: University of Texas at Austin, USA
Eric C Stevens: Salt Lake City, Utah, USA

Chapter 5 in A Theory of the Firm's Cost of Capital:How Debt Affects the Firm's Risk, Value, Tax Rate and the Government's Tax Claim, 2007, pp 33-43 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe following sections are included:The Borrowing Rate Determines the Firm's Tax ObligationsThe Cost of Risky DebtRisk of the Tax Shields and the Firm's ClaimsThe WACCThe Marginal Effects of Borrowing on Firm Risk and the WACCThe Marginal Effects of Debt on Firm ValueDebt CapacityThe “Three Claims View” of the FirmThe Value of the Tax ClaimEffective MTR

Keywords: Cost of Capital; Marginal Tax Rate; WACC (Weight Average Cost of Capital); Debt Capacity; Leverage; Borrowing; Tax Shields (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2007
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