Theory Of The Firm's Cost Of Capital, A: How Debt Affects The Firm's Risk, Value, Tax Rate, And The Government's Tax Claim

The cost of capital concept has myriad applications in business decision-making. The standard methodology for deriving cost of capital estimates is based on the seminal Modigliani-Miller analyses. This book generalizes this framework to include non-debt tax shields (e.g., depreciation), interactions between the borrowing rate and tax shields, and default considerations. It develops several new res...