主管：中国科学院
主办：中国优选法统筹法与经济数学研究会
　　　中国科学院科技战略咨询研究院
Chinese Journal of Management Science

Chinese Journal of Management Science ›› 2011, Vol. 19 ›› Issue (3): 46-54.

Previous Articles     Next Articles

Interactions of Investment and Financing Decisions：On the View of Tax Benefit and Bankruptcy Cost

PENG Cheng1, YANG Hong1,2, HUANG Rong2   

  1. 1. Research Center for International Business and Economy, Sichuan International Studies University, Chongqing 400031, China;
    2. Plymouth Business School, University of Plymouth, Plymouth PL4 8AA, UK
  • Received:2010-04-22 Revised:2011-09-26 Online:2011-06-30 Published:2011-06-30

PDF (PC)

1202

Abstract: This paper analyzes interaction relationships of investment and financing decisions on the view of tax benefit and bankrupt cost by the mean of real options.It discloses some kind of coordination relationships of investment and financing decisions,which would be different under the conflicts of equity-holders and debt-holders because of overinvestment resulting from ove-rchasing of tax benefit of equity-holders and the consequent high debt financing cost,which means non-efficient financing decisions,caused by non-efficient investment decisions.Nevert heless,overinvestment under debtagency conflicts would be abated by tax substitution of depreciation and thus relieves non-efficient decisions of financing decisions.

Key words: tax benefit, bankruptcy cost, investment decision, financing decision, interactions

CLC Number: