Arbeitspapier
The Equity Trap, the Cost of Capital and the Firm´s Growth Path
This paper reconsiders Sinns (1991) nucleus theory of the corporation by comparing two different regimes for the equity trap. In the first of these, all cash paid to the shareholders is taxed as dividends, in the second, shareholders are allowed a tax-free return of capital contributed through new issues. A substantial difference is found between the regimes in the seize of initial equity injections, although in both regimes, no dividends are paid until a new long-run equilibrium is reached. Contrary to Sinn, we find that with optimal behavior, the cost of new equity is lower than suggested by conventional formulae.
- Sprache
-
Englisch
- Erschienen in
-
Series: Working Paper ; No. 2006:19
- Klassifikation
-
Wirtschaft
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Business Taxes and Subsidies including sales and value-added (VAT)
Fiscal Policies and Behavior of Economic Agents: Firm
- Thema
-
dividend taxation
equity trap
cost of capital
nucleus theory
growth path
Kapitalertragsteuer
Kapitalkosten
Unternehmenswachstum
Aktionäre
Verhaltensökonomik
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Lindhe, Tobias
Södersten, Jan
- Ereignis
-
Veröffentlichung
- (wer)
-
Uppsala University, Department of Economics
- (wo)
-
Uppsala
- (wann)
-
2006
- Handle
- URN
-
urn:nbn:se:uu:diva-13254
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Lindhe, Tobias
- Södersten, Jan
- Uppsala University, Department of Economics
Entstanden
- 2006
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