Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26476
Authors: 
Weichenrieder, Alfons J.
Klautke, Tina
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2431
Abstract: 
Tax neutrality towards alternative financing instruments for corporate investment is a ubiquitous demand in the political debate. At the same time, the literature is surprisingly silent about the magnitude of possible efficiency costs of a departure from tax neutrality. Against this background, the present paper discusses the theory of capital structure and provides backof-the-envelope calculations of the possible efficiency cost of a tax distortion of the debtequity decision.
Subjects: 
Debt-equity choice
capital structure
excess burden of taxation
JEL: 
H25
G32
Document Type: 
Working Paper

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