A South African perspective on the existence of an interest tax shield
| Autor: | Magdalena Shotter, A.J. Pienaar |
|---|---|
| Jazyk: | angličtina |
| Rok vydání: | 2000 |
| Předmět: |
Finance
lcsh:Management. Industrial management business.industry Tax shield Direct tax lcsh:HB71-74 lcsh:Economics as a science Monetary economics lcsh:Business Tax avoidance General Business Management and Accounting Dividend tax Adjusted present value Value-added tax Ad valorem tax lcsh:HD28-70 business lcsh:HF5001-6182 General Economics Econometrics and Finance Indirect tax |
| Zdroj: | South African Journal of Economic and Management Sciences, Vol 3, Iss 2, Pp 308-319 (2000) |
| ISSN: | 2222-3436 1015-8812 |
| Popis: | This paper investigates whether the use of debt in the capital structure of a company is beneficial to its shareholders. It finds that, in the South African context, gearing has no effect on the value of a company. The use of debt can increase the value of a company in a country where capital profits and interest are taxed equally. This is the result of an interest tax shield, which is directly related to the tax deductibility of interest paid. However, when capital growth and dividends are exempt in the bands of investors, as is the case in South Africa, the interest tax shield does not exist, and there appears to be no benefit in increasing debt. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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