Leverage in an International Setting
The general business environment may differ from one country to another, and these country-specific factors have a significant impact on determining a company’s capital structure. Taxes, regulations, and traditions can explain the different degrees of leverage in the two countries….
Effects of Capital Structure Policy
When evaluating the capital structure of a company, an analyst must consider the following: The capital structure of the company over time. The financial analyst can evaluate the company’s ability to handle its financial obligations, considering the industry the company…
Capital Structure Cost Considerations
Proposition I with Taxes: The Tax Shield A tax shield is the deliberate use of taxable expenses to offset taxable income. The interest expense on debt provides a tax shield that results in savings that enhance the value of a…
