| dc.contributor.author | Hull, Robert M. | en_US |
| dc.date | December 2005 | en_US |
| dc.date.accessioned | 2014-11-14 | en_US |
| dc.date.accessioned | 2018-11-02T14:38:09Z | |
| dc.date.available | 2014-11-14 | en_US |
| dc.date.available | 2018-11-02T14:38:09Z | |
| dc.identifier.other | School of Business Working Paper Series; No. 62 | en_US |
| dc.identifier.uri | https://wuir.washburn.edu/handle/10425/199 | |
| dc.description.abstract | This 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.medium | PDF | en_US |
| dc.language.iso | Eng | en_US |
| dc.publisher | Washburn University, School of Business | en_US |
| dc.subject | Financial leverage | en_US |
| dc.subject | Capital structure model | en_US |
| dc.subject | Gain-to-Leverage | en_US |
| dc.subject | Wealth transfer | en_US |
| dc.title | Leverage Borrowing Rates, Tax Rates And Growth Rates | en_US |
| dc.type | Working paper | en_US |
| washburn.identifier.cdm | 133 | en_US |
| washburn.identifier.oclc | 63542990 | en_US |
| washburn.source.location | | en_US |
