Leasing, Taxes, and the Cost of Capital.
A model of firm financial and investment behavior when there is a possibility of tax exhaustion is used to analyze the incentives for firms to act as lessees or lessors and the determination of the equilibrium rental rate in the leasing market. A number of results emerge that are relevant for public...
| Huvudupphovsmän: | , |
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| Materialtyp: | Journal article |
| Språk: | English |
| Publicerad: |
1991
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| Sammanfattning: | A model of firm financial and investment behavior when there is a possibility of tax exhaustion is used to analyze the incentives for firms to act as lessees or lessors and the determination of the equilibrium rental rate in the leasing market. A number of results emerge that are relevant for public policy. It is shown that (1) leasing may diminish aggregate investment by comparison with the situation when it does not occur; (2) rents are likely to be earned on leasing activities; and (3) a purely tax-induced positive relationship exists between aggregate investment and corporate profits. |
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