Effects of Tax Rate Changes on the Cost of Capital: The Case of Japanese Firms - 10.1628/001522107X220062 - Mohr Siebeck
Economics

Keiichi Kubota, Hitoshi Takehara

Effects of Tax Rate Changes on the Cost of Capital: The Case of Japanese Firms

Section: Articles
FinanzArchiv (FA)

Volume 63 () / Issue 2, pp. 163-185 (23)

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The paper studies the effects that tax rate changes have on the cost of capital when firms follow target leverage ratios. We show that changes in individual income tax rates are neutral. The focus therefore is on the effects of changes in marginal corporate tax rates. These effects are computed for Japanese firms. Special emphasis is given to changes in statutory tax rates and provisions that allow firms to carry their losses forward.
Authors/Editors

Keiichi Kubota No current data available.

Hitoshi Takehara No current data available.