Show simple item record

dc.contributor.authorHull, Robert M.en_US
dc.dateDecember 2005en_US
dc.date.accessioned2014-11-14en_US
dc.date.accessioned2018-11-02T14:38:09Z
dc.date.available2014-11-14en_US
dc.date.available2018-11-02T14:38:09Z
dc.identifier.otherSchool of Business Working Paper Series; No. 62en_US
dc.identifier.urihttps://wuir.washburn.edu/handle/10425/199
dc.description.abstractThis paper extensively broadens the perpetuity gain to leverage (GL) equations of Modigliani and Miller (1963) and Miller (1977) by developing a capital structure model (CSM) that contains a series of perpetuity GL equations applicable to a variety of situations. The CSM equations show how changes in tax rates, growth-adjusted equity discount rates and debt discount rates influence firm value. These three "change-rate" factors are missing from the MM-Miller framework explaining why their equations cannot account for leverage-related costs leading to an optimal debt level. Also, the CSM extends MM-Miller by addressing a leveraged situation where wealth transfers can result. Finally, the outcomes of the CSM equations support the predictions of major capital structure theories and clarify points of controversy.en_US
dc.format.mediumPDFen_US
dc.language.isoEngen_US
dc.publisherWashburn University, School of Businessen_US
dc.subjectFinancial leverageen_US
dc.subjectCapital structure modelen_US
dc.subjectGain-to-Leverageen_US
dc.subjectWealth transferen_US
dc.titleLeverage Borrowing Rates, Tax Rates And Growth Ratesen_US
dc.typeWorking paperen_US
washburn.identifier.cdm133en_US
washburn.identifier.oclc63542990en_US
washburn.source.locationen_US


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record