Theoretical analysis demonstrates optimal capital structure under taxation, indicating that debt maturity structure is irrelevant to firm value.
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.
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Craig M. Lewis (1990) studied this question.
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