TY  - JOUR
AU  - McDonald,Robert L.
TI  - Government Debt and Private Leverage: An Extension of the Miller Theorem
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 965
PY  - 1984
Y2  - March 1984
UR  - http://www.nber.org/papers/w0965
L1  - http://www.nber.org/papers/w0965.pdf
N1  - Author contact info:
Robert L. McDonald
Department of Finance  Jacobs Center
Northwestern University
2001 Sheridan Rd.
Evanston, IL  60208-2006
Tel: 847-491-8344
Fax: 847-491-5719
E-Mail: r-mcdonald@northwestern.edu
AB  - This paper shows how government financing decisions can influence the corporate decision to use debt or equity finance. In particular, it is shown that an increase in the stock of taxable government debt reduces the equilibrium quantity of corporate debt, and that an increase in the stock of tax-free government debt reduces the equilibrium quantity of corporate equity. The effects of inflation rate and tax rate changes are also considered.
ER  -