Debt and taxes. A multiperiod investigation

Amir Barnea*, Eli Talmor, Robert A. Haugen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper extends the Miller bond market equilibrium analysis to a multiperiod setting. From the model developed we derive several predictions relating optimal financial leverage to firm characteristics and to the business cycle. The analysis also reveals some interesting determinants of the market value of the tax subsidy associated with corporate debt.

Original languageEnglish
Pages (from-to)79-97
Number of pages19
JournalJournal of Banking and Finance
Issue number1
StatePublished - Mar 1987


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