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An examination of tax and agency costs rationales for long-term leasing

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dc.contributor.authorTorregrosa, Paul T.en
dc.contributor.committeechairHansen, Robert S.en
dc.contributor.committeememberChance, Donald M.en
dc.contributor.committeememberFrendewey, James O.en
dc.contributor.committeememberKeown, Arthur J.en
dc.contributor.committeememberKumar, Ramanen
dc.contributor.departmentBusiness Administrationen
dc.date.accessioned2019-02-15T21:22:15Zen
dc.date.available2019-02-15T21:22:15Zen
dc.date.issued1988en
dc.description.abstractThe focus of this dissertation is on tax and agency costs rationales for the use of long term leases. While much attention has been given to the valuation effects of debt and equity financing, the literature is surprisingly scant on the valuation effects of lease financing. This research develops a model that demonstrates that lease contracts can create wealth in two ways: one, by partially alleviating the Myers' underinvestment problem created by the issuance of risky debt and the other, by effectively transferring tax shields from low income lessees to high income lessors. The implications of the model are formulated into testable hypotheses which are empirically tested in both financial leases and sale and leaseback transactions. Several new empirical findings are reported in the study. Evidence presented indicates that the market reacts favorably to lease announcements by lessees involved in either sale and leaseback transactions or financial leases. No general conclusions could be drawn for the valuation impact for lessors. In addition, the results suggest that tax motives are of primary importance in explaining the use of lease financing. However, the agency cost rationale is not confirmed by the data.en
dc.description.degreePh. D.en
dc.format.extentviii, 114 leavesen
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttp://hdl.handle.net/10919/87677en
dc.language.isoen_USen
dc.publisherVirginia Polytechnic Institute and State Universityen
dc.relation.isformatofOCLC# 19114758en
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subject.lccLD5655.V856 1988.T675en
dc.subject.lcshLeases -- Taxationen
dc.subject.lcshCosten
dc.titleAn examination of tax and agency costs rationales for long-term leasingen
dc.typeDissertationen
dc.type.dcmitypeTexten
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

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