Capital Structure and the Cost of Capital
Stephen A. Ross
Massachusetts Institute of Technology (MIT) - Sloan School of Management; Yale University - International Center for Finance
Journal of Applied Finance (Formerly Financial Practice and Education) Journal of Applied Finance, Vol. 15, No. 1, Spring/Summer 2005
This article provides an intertemporal synthesis of the basic neoclassical theory of capital structure as a tradeoff between tax effects and bankruptcy costs. The latter is partially endogenized as the loss of future tax benefits and the stationary reorganization policy is considered.
Number of Pages in PDF File: 19
JEL Classification: G300, G310, G320Accepted Paper Series
Date posted: August 4, 2005
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