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Cited by 1,331

The DOI matches its Crossref record; 8 of the 8 references it cites were found in a registry or an index.

How Big Are the Tax Benefits of Debt?

Graham, John R.·2000·The Journal of Finance
DOI 10.1111/0022-1082.00277
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Abstract

I integrate under firm‐specific benefit functions to estimate that the capitalized tax benefit of debt equals 9.7 percent of firm value (or as low as 4.3 percent, net of personal taxes). The typical firm could double tax benefits by issuing debt until the marginal tax benefit begins to decline. I infer how aggressively a firm uses debt by observing the shape of its tax benefit function. Paradoxically, large, liquid, profitable firms with low expected distress costs use debt conservatively. Product market factors, growth options, low asset collateral, and planning for future expenditures lead to conservative debt usage. Conservative debt policy is persistent.

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Metadata

Authors
Graham, J. R.
Venue
The Journal of Finance
Publisher
Wiley
Published
2000-10
Volume
55
Issue
5
Pages
1901-1941
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/0022-1082.00277
OpenAlex
W3126076569
Cited by
1,331
References
8
FWCI
71.59
Type
journal article
Language
en
Open access
closed

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CoChat. (2026). Citation check: How Big Are the Tax Benefits of Debt? https://app.cochat.ai/papers/10.1111/0022-1082.00277
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Graham, J. R. (2000). How Big Are the Tax Benefits of Debt? The Journal of Finance. https://doi.org/10.1111/0022-1082.00277

Data sources

Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.