Since 2014
Firm Financing in Chile After the 2014-2015 Tax Reform: Debt of Equity?
Economic Analysis Review
View Archive Info| Field | Value | |
| Title |
Firm Financing in Chile After the 2014-2015 Tax Reform: Debt of Equity?
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| Creator |
Hernández T., Leonardo
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| Subject |
Corporate tax, income tax, payout ratio, tax avoidance, firm financing.
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| Description |
This paper analyzes the effects of the 2014-2015 Chilean tax reform on firms’ valuation and incentives to retain earnings and finance their operations with equity versus debt. By analyzing the effects of the reform on total taxes paid and cash flows received by investors, the paper concludes that in general the reform reduces the value of firms and lessens the incentives to retain earnings. Also, simulations show that the majority of firms would choose the accrual or ‘attributed’ tax based system. However, if the latter is not permitted firms will choose debt over equity. The cash-based or semi-integrated system becomes the preferred option only when tax avoidance is possible.
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| Publisher |
Universidad Alberto Hurtado - Facultad de Economía y Negocios
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| Contributor |
—
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| Date |
2016-10-21
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| Type |
info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion — — |
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| Format |
application/pdf
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| Identifier |
http://www.rae-ear.org/index.php/rae/article/view/498
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| Source |
Revista de Análisis Económico - Economic Analysis Review; Vol 31, No 2 (2016); 65-100
Revista de Análisis Económico – Economic Analysis Review; Vol 31, No 2 (2016); 65-100 0718-8870 0716-5927 |
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| Language |
eng
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| Relation |
http://www.rae-ear.org/index.php/rae/article/view/498/584
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| Rights |
Copyright (c) 2016 Revista de Análisis Económico – Economic Analysis Review
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