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A Multiperiod Theory of Corporate Financial Policy under Taxation

Published online by Cambridge University Press:  06 April 2009

Craig M. Lewis
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Abstract

This paper examines multiperiod corporate financial policy in a world where the only market imperfection is taxation. The optimal financial policy determines the firm's capital structure and debt maturity structure. Two implications of this policy are: (1) there can be a set of debt-asset ratios that is consistent with firm value maximization, and (2) debt maturity structure is irrelevant to firm value.

Type
Research Article
Information
Journal of Financial and Quantitative Analysis , Volume 25 , Issue 1 , March 1990 , pp. 25 - 43
Copyright
Copyright © School of Business Administration, University of Washington 1990

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