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The purpose of this study is to analyze the effect of non-debt tax shield (NDTS), firm growth, liquidity, and profit volatility whether simultaneously and/or partially towards debt policy in building construction firms listed on Indonesian Stock Exchange period 2016-2020. This study uses panel data regression with fixed effect model to estimate 60 samples from 12 companies selected through purposive sampling. The results show that NDTS, firm growth, liquidity, and profit volatility simultaneously have a significant effect on debt policy. Partially, firm growth and profit volatility have a positive significant effect on debt policy, while NDTS and liquidity have no significant effect. These findings suggest that Indonesian building construction firms do not consider liquidity and non-debt tax shield as a consideration of increasing or decreasing debt. Moreover, Indonesian building construction firms with strong firm growth and high profit volatility actually have a low proportion of debt. [ABSTRACT FROM AUTHOR]

Using a sample of over five hundred convertible debt issues carried out by non-financial American firms between 2004 and 2014, this paper identifies the motives for selling convertible bonds through private offerings by companies in good financial standing. The empirical examination, including the analysis of main issue parameters and selected proxies for financial performance and growth opportunities of the issuers, indicates that profitable firms that issue private convertibles are medium, undervalued companies which are likely to raise hybrid capital as a cheaper substitute for common equity to finance their investment process. They presumably place convertible debt in the private market in order to speed up raising funds, to avoid high flotation costs of selling new securities publicly and to control their future shareholders structure. [ABSTRACT FROM AUTHOR]

As a general rule, when a taxpayer owes a debt and there is cancellation or forgiveness of the debt, the cancelled amount may be taxable income. The Mortgage Debt Relief Act provides an exception where taxpayers can exclude income from the discharge of debt on a principal residence in certain circumstances. Debt reduced through mortgage restructuring, as well as mortgage debt cancelled during a foreclosure, qualifies for relief. The Act applies to debt forgiven in calendar years 2007 through 2013. Up to $2 million of forgiven debt is eligible for exclusion. Members of Congress are currently trying to extend the Act beyond December 31, 2013. Even if a taxpayer does not qualify under the Act, other tax provisions can provide tax exclusion if the taxpayer is insolvent when the debt is cancelled or if the debt is discharged through bankruptcy. Exclusion can also apply in those states where homeowners have mortgages classified as non-recourse loans. The Federal government and state governments have pushed big banks to expand their debt forgiveness programs in order to reduce foreclosures during the recent mortgage crisis. When there is forgiveness, then the Act can help the homeowners by exempting the forgiveness from gross taxable income. The taxpayer must reduce the basis of the principal residence by the amount that is excluded from gross income. When the Act was allowed to expire, the push for debt forgiveness programs was offset by tax consequences to the homeowner. In other words, upon expiration of the Act, the underwater homeowner can start out appreciating the forgiveness of principal on the mortgage only to be later disappointed by the large tax bill based on the forgiveness. During its operative years, the Act could have some unintended consequences. In the debt forgiveness programs operated by the big banks, the taxpayers have an incentive to downplay their financial conditions. This incentive can lead to a strategy of lowering work and income in order to satisfy forgiveness guidelines. Once the forgiveness occurs with its reduction in mortgage principal, the taxpayer can resume normal work after creating a temporary illusion of financial need. A program aimed at helping the needy is instead helping the imposter who might pretend to be needy. In addition, unmarried taxpayers can play the roles of the low income homeowner and the high income companion as they obtain tax exclusion. Again, the unintended consequence can be helpful to the imposter rather than the truly needy. [ABSTRACT FROM AUTHOR]

The existing literature delves into a problem of a marketplace of hybrid debt issuance very rarely. Most previous studies do not apply to convertibles financing directly but have been twined into a broader examination of debt and equity issues. Thus, it seems necessary to identify potential factors which may influence management decisions on selling convertibles publicly or privately. The motives for using private convertible bonds are particularly interesting in this context. The intent of this paper was to examine the determinants on selling convertibles in the private market by companies in good financial performance. To our best knowledge, the study is one of the first that helps to answer an important question, namely why profitable firms decide to borrow capital from private sources instead of offering convertible bonds publicly. The study examined 529 private issues of straight, callable and putable convertible bonds carried out between 2004 and 2014 by manufacturing and service companies from the United States. A few selected issuance parameters and proxies for financial performance of the issuers (describing their size, market value, leverage, profitability, growth opportunities and cost of raising capital) have been analyzed by means of descriptive statistics, statistical significance tests, and both logistic regression and classification tree models. The results of the research indicate that profitable companies are likely to use private convertible bonds as a substitute for common equity. Issuing convertible debt may enable them to avoid an issuance of undervalued equity and to change their unfavourable capital structure, perhaps to be better prepared to carry out their further investment projects. It is possible that profitable firms decide to borrow hybrid capital from a small group of dedicated lenders for two reasons, which are similar conclusions for straight debt. First, because they want to speed up raising capital by cutting down the time for a due-diligence process. Secondly, because they try to conceal from rival firms the information about their valuable investment options. [ABSTRACT FROM AUTHOR]