Tax complexity and the cost of debt
Franklin, Lesley and Tuck, Penelope. (2001) Tax complexity and the cost of debt. Journal of Applied Accounting Research, Vol.6 (No.2). pp. 13-29. ISSN 0967-5426Full text not available from this repository.
Official URL: http://dx.doi.org/10.1108/96754260180001026
Now that debt has replaced equity as the preferred source of finance for many UK companies, the correct calculation of the cost of debt assumes even greater importance than it has done formerly. While financial management textbooks are in agreement on how to calculate the pre-tax cost of debt, there is much less agreement on how to calculate the after tax cost of debt. The different approaches taken by different authors leave students and practitioners confused and unsure as to how they should proceed. This article explores the calculation of the after tax cost of debt in order to help both students and practitioners to understand the interaction of tax and debt in the current UK environment and to be aware of the limitations of the various simplifications which are made, explicitly or implicitly, in the textbooks.
|Item Type:||Journal Article|
|Subjects:||J Political Science > JS Local government Municipal government|
|Divisions:||Faculty of Social Sciences > Warwick Business School > International Centre for Governance & Public Management
Faculty of Social Sciences > Warwick Business School
|Journal or Publication Title:||Journal of Applied Accounting Research|
|Publisher:||Emerald Group Publishing Ltd|
|Number of Pages:||17|
|Page Range:||pp. 13-29|
|Access rights to Published version:||Restricted or Subscription Access|
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