scholarly journals The effect of tax avoidance on cost of debt capital: Evidence from Korea1

2017 ◽  
Vol 48 (4) ◽  
pp. 83-89 ◽  
Author(s):  
H-J. Shin ◽  
Y-S. Woo
Keyword(s):  
Empirical Analysis ◽  
Tax Avoidance ◽  
Cost Of Debt ◽  
Debt Ratio ◽  
Positive Relation ◽  
Critical Factors ◽  
Information Risk ◽  
Debt Capital ◽  
The Cost ◽  
A Company

This study investigates the relation between tax avoidance and the cost of debt capital and analyzes the effect of the debt ratio and profitability on the relation between tax avoidance and the cost of debt. The results of our empirical analysis are as follows. First, tax avoidance is significantly positively associated with the cost of debt capital. This result shows that tax avoidance is considered as the signal of increasing information risk; thus, investors demand a higher return. Second, the debt ratio decreases the positive relation between tax avoidance and the cost of debt capital. This result indicates that the positive relation between tax avoidance and the cost of debt capital significantly decreases when the debt ratio is high. Finally, we find that the profitability of a company increases the positive relation between tax avoidance and the cost of debt capital. This result means that the cost of debt capital increases as the tax avoidance increase when the profitability of company is favorable. We find that the profitability of a company is one of the critical factors that have an effect on the relation between tax avoidance and the cost of debt capital.

scholarly journals Will the Reduction of CO2 Emissions Lower the Cost of Debt Financing? The Case of EU Countries

Energies ◽  
2021 ◽  
Vol 14 (24) ◽  
pp. 8361
Author(s):  
Sylwester Kozak
Keyword(s):  
Co2 Emissions ◽  
Risk Premium ◽  
Cost Of Debt ◽  
Public Authorities ◽  
Eu Countries ◽  
Debt Capital ◽  
Reduction Of Co2 ◽  
The Cost ◽  
The Relationship ◽  
A Company

The main objective of this article is to test the relationship between the intensity of CO2 emissions and company’s cost of debt capital. This study fills a gap in the financial literature on this compound by examining a sample of 225 large nonfinancial enterprises operating in 15 EU countries in the years 2018–2021. The fractional logit regression controlling for company’s characteristics (assets, profitability, liquidity and leverage) was used. The results show that by reducing the intensity of CO2 emissions, a company can reduce the cost of debt. This relationship was confirmed for three measures of intensity, i.e., CO2 emissions in relation to revenues, assets and number of employees. Markets and financial institutions impose an additional risk premium in relation to companies operating in an industry considered to be comprised of strong CO2 emitters. The use of the latest data for a wide sample of European enterprises provides an up-to-date assessment of the analyzed issues and the results can be used by enterprises and public authorities when analyzing the benefits of implementing a technology that reduces CO2 emissions.

Information Risk and the Cost of Debt Capital

2005 ◽  
Author(s):  
Sattar A. Mansi ◽  
William F. Maxwell ◽  
Darius P. Miller
Keyword(s):  
Cost Of Debt ◽  
Information Risk ◽  
Debt Capital ◽  
The Cost

scholarly journals Tax Avoidance Sebagai Latar Belakang Dalam Memanfaatkan Tax Deductible Expense (Studi pada Perusahaan Manufaktur yang Terdaftar di BEI)

InFestasi ◽  
2019 ◽  
Vol 14 (2) ◽  
pp. 154
Author(s):  
Fitri Oktariani ◽  
Putu Indrajaya Lembut
Keyword(s):  
Stock Exchange ◽  
Tax Avoidance ◽  
Cost Of Debt ◽  
Linear Regression Method ◽  
Tax Rate ◽  
Research Population ◽  
The Government ◽  
The Cost ◽  
A Company ◽  
Positive Effect

<em><span lang="EN-US">This study aims to test and prove empirically the effect of tax avoidance on the cost of debt. The research population is a company listed on the Indonesia Stock Exchange with a sample of companies in the manufacturing category during 2012 to 2017, which is as many as 50 sample companies. Sampling uses purposive sampling and the data analysis method used is a simple linear regression method. The results of this study prove that tax avoidance has a positive effect on the cost of debt. Based on the results of testing this study, it can be concluded that the company will always use a tax deductible expense in its efforts to conduct tax avoidance regardless of the tax rate that has been imposed by the government.</span><span lang="EN-US">Thus, the government should consider further policies by focusing more on regulating the recognition of tax deductible expenses, rather than issuing a policy of reducing back rates, especially for corporate taxpayers. </span></em>

scholarly journals PENGARUH PENGHINDARAN PAJAK TERHADAP BIAYA HUTANG PASCA PERUBAHAN TARIF PAJAK BADAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

2016 ◽  
Vol 3 (2) ◽  
pp. 113
Author(s):  
Nining Purwanti
Keyword(s):  
Panel Data Analysis ◽  
Tax Avoidance ◽  
Negative Influence ◽  
Cost Of Debt ◽  
Tax Rates ◽  
Rate Reduction ◽  
Tax Rate ◽  
Study Find ◽  
Tax Reduction ◽  
The Cost

The aim of the research is to analyze tax avoidance behavior to cost of debt moderated by tax rates changes, on manufacturing company in Indonesia in 2008-2010. Panel data analysis is used in this research. In this study usingbook tax gap to measure tax avoidance and using the models used by Lim (2010), Dwi Martani (2011) and Widya Sartika (2012) to meansure cost of debt. The study find that tax avoidance has negative influence on cost of debt. Tax avoidance creates a risk thereby increasing the cost of debt. In the period before tax rate reduction the influence of tax avoidance on cost of debt smaller compare after period of tax reduction, this indicates the presence of earning management conducted by the company before tax rate reduction.

scholarly journals The cost of debt capital revisited

2018 ◽  
Vol 12 (2) ◽  
pp. 721-753 ◽  
Author(s):  
Rainer Baule
Keyword(s):  
Cost Of Debt ◽  
Debt Capital ◽  
The Cost

The 2008–2009 global financial crisis and the cost of debt capital among SMEs: Swedish evidence

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Darush Yazdanfar ◽  
Peter Öhman
Keyword(s):  
Financial Crisis ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Dynamic Panel Data ◽  
Cost Of Debt ◽  
Cross Sectional ◽  
Content Type ◽  
Debt Capital ◽  
Using Data ◽  
The Cost

PurposeThe main purpose of this study is to describe and analyse the relationship between the 2008–2009 global financial crisis and small and medium-sized enterprises' cost of debt capital.Design/methodology/approachStatistical methods, including multiple OLS and dynamic panel data, were used to analyse a longitudinal cross-sectional panel dataset of 3865 Swedish SMEs operating in five industry sectors over the 2008–2015 period.FindingsThe results suggest that the cost of debt was influenced by the financial crisis and another macroeconomic factor, i.e. the interbank interest rate, and by firm-specific factors such as firm size and lagged cost of debt.Originality/valueTo the authors' best knowledge, this is one of few studies to examine the cost of debt among SMEs during the crisis and post-crisis periods using data from a large-scale, longitudinal, cross-sectional database.

scholarly journals Analysis of the structure and cost of capital in mining enterprises

2017 ◽  
Vol 33 (1) ◽  
pp. 77-92 ◽  
Author(s):  
Robert Ranosz
Keyword(s):  
Capital Structure ◽  
Cost Of Capital ◽  
Cost Of Debt ◽  
Cost Of Equity ◽  
Mining Company ◽  
Optimal Capital Structure ◽  
Mining Companies ◽  
Debt Capital ◽  
Capital Funding ◽  
The Cost

AbstractThis article focuses on the analysis of the structure and cost of capital in mining companies. Proper selection of appropriate levels of equity and debt capital funding of investment has a significant impact on its value. Thus, to maximize the value of the company, the capital structure of the company should be composed to minimize the weighted average cost of capital. T he objective of the article is to present the capital structure of selected Polish and world’s mining companies and estimate their cost of equity and debt capital. In the paper the optimal capital structure for the Polish mining company (KGHM SA) was also estimated. It was assumed that both Polish and world’s mining companies, have no debt exceeding 45% in the financing structure. For the most of analyzed cases, the level of financing with debt capital is in the range between 10% and 35%. T he cost of equity exceeds the cost of debt capital and is in the range between 8% and 20%, while the cost of debt capital reaches the range between 1.9% and 12%. T he analysis of the optimal capital structure determining, performed for the selected mining company, showed that debt capital funding for the company should be in the range between 5.7% and 7.4%.

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