Abstract

http://ssrn.com/abstract=175868
 
 

References (42)



 
 

Citations (54)



 


 



Debt-Equity Hybrid Securities


Ellen Engel


University of Chicago Booth School of Business

Merle Erickson


University of Chicago - Booth School of Business

Edward L. Maydew


University of North Carolina at Chapel Hill



Abstract:     
Trust preferred stock, first issued in 1993, was engineered to be treated as preferred stock for financial statement purposes and as debt for tax purposes (i.e., payments on trust preferred stock are deductible by the issuer). Our analyses exploit the features of trust preferred stock to shed light on three issues: 1) the extent to which firms incur costs to manage the balance sheet classification of a security; ii) the magnitude of tax benefits, if any, associated with leverage increasing capital structure decisions, and iii) the extent to which investor-level taxation inmposes implicit taxes on securities.

Number of Pages in PDF File: 28

JEL Classification: M41, M43, H25, G32

working papers series





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Date posted: September 13, 1999  

Suggested Citation

Engel, Ellen and Erickson, Merle and Maydew, Edward L., Debt-Equity Hybrid Securities. Available at SSRN: http://ssrn.com/abstract=175868 or http://dx.doi.org/10.2139/ssrn.175868

Contact Information

Ellen Engel
University of Chicago Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-0966 (Phone)
866-377-52152 (Fax)
Merle Erickson
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-0716 (Phone)
773-702-0458 (Fax)
Edward L. Maydew (Contact Author)
University of North Carolina at Chapel Hill ( email )
McColl Building
Chapel Hill, NC 27599-3490
United States
919-843-9356 (Phone)
HOME PAGE: http://www.kenan-flagler.unc.edu/faculty/directory/accounting/edward-maydew

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