Capital structure in the absence of corporate tax : the case of Australian gold mining firms

Moore, John. (1992). Capital structure in the absence of corporate tax : the case of Australian gold mining firms Honours Thesis, School of Business, The University of Queensland.

       
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Author Moore, John.
Thesis Title Capital structure in the absence of corporate tax : the case of Australian gold mining firms
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1992
Thesis type Honours Thesis
Total pages 135
Language eng
Subjects 14 Economics
Formatted abstract This study applies the static trade-off and pecking order theories of capital structure to a sample of firms with no corporate tax liability. Income from the working of a gold mining property was exempt from income tax in Australia until 1991. The sample therefore consists of Australian gold mining firms. The study finds that, contrary to the predictions of static trade-off theory, the sample firms did use debt financing. However, there is little evidence to support a pecking order explanation for their use of debt. The theories are found to have some predictive power for a control group of taxed mining firms. In contrast to the results for the sample as a whole, a case study of two gold mining firms is included in which some evidence of pecking order effects can be seen. The conclusion of the study is that in general the determinants of the use of debt by the zero tax firms remain undiscovered.

 
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