eprintid: 2735
rev_number: 13
eprint_status: archive
userid: 69
dir: disk0/00/00/27/35
datestamp: 2015-07-30 15:03:51
lastmod: 2015-07-31 10:30:07
status_changed: 2015-07-30 15:03:51
type: monograph
metadata_visibility: show
creators_name: Nicodano, Giovanna
creators_name: Regis, Luca
creators_id: 
creators_id: luca.regis@imtlucca.it
title: Ownership, Taxes and Default
ispublished: submitted
subjects: HB
subjects: HG
divisions: EIC
full_text_status: public
monograph_type: imt_eic_working_paper
keywords: JEL Classification Codes: G32, H25, H32, L22 - Keywords: Ownership structure, Capital structure, Dividend taxes, Thin Capitalization, Groups, Securitization, Private equity.
abstract: This paper determines ownership and leverage of two units facing a tax-
bankruptcy trade-o�. Connected units have higher leverage and lower tax burden,
because of internal support through both bailouts and corporate dividends. Owner-
ship adjusts to additional tax provisions. A hierarchical group with a wholly-owned
subsidiary results from Thin Capitalization rules. The presence of corporate divi-
dend taxes generates horizontal groups, or a Special Purpose Vehicle, or a private
equity fund. Combinations of tax provisions contain tax savings, debt and default
in connected units. No bailout provisions, such as the Volcker rule, succeed in
reducing leverage and default.
date: 2015-07
date_type: published
number: 7
publisher: IMT Institute for Advanced Studies Lucca
pages: 38
institution: IMT Institute for Advanced Studies Lucca
issn: 2279-6894
citation:   Nicodano, Giovanna and Regis, Luca  Ownership, Taxes and Default.  EIC working paper series  #7/2015    IMT Institute for Advanced Studies Lucca    ISSN 2279-6894.    (Submitted)   
document_url: http://eprints.imtlucca.it/2735/1/WP_2015_7%20%281%29.pdf