as possible due to tax-deductible i

as possible due to tax-deductible interest payments. Moreover, the value of a levered
firm exceeds that of an unlevered firm by an amount equal to the present value of the tax
savings that arise from the use of debt.
Miller (1977) has presented an alternative theory by incorporating three different tax
rates in his analysis (corporate tax rate, personal tax rate on equity income, and the
regular personal tax rate which applies to interest income). Miller proposed that net tax
savings from corporate borrowings can be zero when personal as well as corporate taxes
are considered. Since interest income is not taxed at the corporate level but taxed at the
personal level, whereas equity income is taxed at the corporate level but may largely
escape personal taxes when it comes in the form of capital gains. So the effective personal
tax rate on equity income is usually less than the regular personal tax rate on interest
income. This factor reduces the advantage of debt financing. In Miller’s analysis, the
supply of corporate debt expands as long as the corporate tax rate exceeds the personal
tax rate of investors absorbing the increased supply. The level of supply which equates
these two tax rates establishes an optimal debt ratio.
In contrast to the tax benefits on the use of debt finance DeAngelo and Masulis (1980)
proposed that companies have ways other than the interest on debt to shelter income
such as depreciation, investment tax credits, tax loss carry forwards, etc. The benefit
of tax shields on interest payments encourages firms to take on more debt, but also
increases the probability that earnings insome yearsmaynot be sufficient to offset all tax
deductions. Therefore, some of them may be redundant including the tax deductibility of
interest payments. So firms with large non-debt tax shields relative to their expected
cash flow include less debt in their capital structure. This view suggests that non-debt
tax shields are the substitute of the tax shields on debt finance, and therefore, the
relationship between non-debt tax shields and leverage should be negative.
Although the benefit of tax shields may encourage the firms to employ more

Hasil (Bahasa Indonesia) 1:

as possible due to tax-deductible interest payments. Moreover, the value of a leveredfirm exceeds that of an unlevered firm by an amount equal to the present value of the taxsavings that arise from the use of debt.Miller (1977) has presented an alternative theory by incorporating three different taxrates in his analysis (corporate tax rate, personal tax rate on equity income, and theregular personal tax rate which applies to interest income). Miller proposed that net taxsavings from corporate borrowings can be zero when personal as well as corporate taxesare considered. Since interest income is not taxed at the corporate level but taxed at thepersonal level, whereas equity income is taxed at the corporate level but may largelyescape personal taxes when it comes in the form of capital gains. So the effective personaltax rate on equity income is usually less than the regular personal tax rate on interestincome. This factor reduces the advantage of debt financing. In Miller’s analysis, thesupply of corporate debt expands as long as the corporate tax rate exceeds the personaltax rate of investors absorbing the increased supply. The level of supply which equatesthese two tax rates establishes an optimal debt ratio.In contrast to the tax benefits on the use of debt finance DeAngelo and Masulis (1980)proposed that companies have ways other than the interest on debt to shelter incomeseperti depresiasi, investasi kredit pajak, pajak badan membawa ke depan, dll. Manfaatdari perisai pajak pada pembayaran bunga mendorong perusahaan untuk mengambil lebih banyak utang, tetapi jugameningkatkan kemungkinan bahwa penghasilan insome yearsmaynot akan cukup untuk mengimbangi semua pajakpengurangan. Oleh karena itu, beberapa dari mereka mungkin berlebihan termasuk pengurangan pajak ataspembayaran bunga. Jadi perusahaan dengan besar non-hutang pajak perisai relatif mereka diharapkanarus kas termasuk utang kurang dalam struktur modal mereka. Pandangan ini menunjukkan bahwa non-utangperisai pajak adalah pengganti perisai-perisai pajak pada utang keuangan, dan karena itu,hubungan antara non-utang pajak perisai dan leverage harus negatif.Meskipun manfaat dari perisai pajak dapat mendorong perusahaan untuk mempekerjakan lebih banyak