dc.contributor.author | Lindset, Snorre | |
dc.contributor.author | Nygård, Guttorm | |
dc.contributor.author | Persson, Svein Arne | |
dc.date.accessioned | 2024-02-14T10:16:45Z | |
dc.date.available | 2024-02-14T10:16:45Z | |
dc.date.created | 2024-02-13T14:55:36Z | |
dc.date.issued | 2024 | |
dc.identifier.citation | Journal of Money, Credit and Banking. 2024, . | en_US |
dc.identifier.issn | 0022-2879 | |
dc.identifier.uri | https://hdl.handle.net/11250/3117459 | |
dc.description.abstract | A dual holder simultaneously owns (private) debt and equity in the same firm. Private debt has a tax advantage, a positive cashflow, which incentivizes its use. This cashflow leads to a lower net cost of debt, which again reduces default risk as well as the cost of external debt. The usual trade-off between tax benefits and bankruptcy costs is altered. Debt priority affects both financing and default decisions. We find that an enterprise-value maximizing firm should issue senior, external debt and junior, private debt, rather than debt with pari-passu priority. Our analysis further highlights that tax authorities can effectively curtail the tax-motivated use of private debt through straightforward measures. | en_US |
dc.language.iso | eng | en_US |
dc.publisher | Wiley | en_US |
dc.rights | Attribution-NonCommercial-NoDerivatives 4.0 Internasjonal | * |
dc.rights.uri | http://creativecommons.org/licenses/by-nc-nd/4.0/deed.no | * |
dc.title | Trade-Off Theory for Dual Holders | en_US |
dc.title.alternative | Trade-Off Theory for Dual Holders | en_US |
dc.type | Peer reviewed | en_US |
dc.type | Journal article | en_US |
dc.description.version | publishedVersion | en_US |
dc.source.pagenumber | 33 | en_US |
dc.source.journal | Journal of Money, Credit and Banking | en_US |
dc.identifier.doi | 10.1111/jmcb.13128 | |
dc.identifier.cristin | 2245611 | |
cristin.ispublished | true | |
cristin.fulltext | original | |
cristin.qualitycode | 2 | |