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A Tax-Induced Clientele for Index-Linked Corporate Bonds.
- Source :
- Journal of Finance (Wiley-Blackwell); Dec1988, Vol. 43 Issue 5, p1257-1263, 7p
- Publication Year :
- 1988
-
Abstract
- This paper analyzes the circumstances under which tax considerations favor or disfavor the use of index-linked corporate bonds. Using a model similar to Miller's, investors' choices of assets depend on their tax preferences for interest income versus capital gains and their preferences for the timing of returns. It is concluded that the absence of index- linked bonds in the U.S. cannot be attributed solely to tax reasons. However, following the 1986 Tax Reform Act, the tax code is expected to disfavor the use of index-linked bonds. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00221082
- Volume :
- 43
- Issue :
- 5
- Database :
- Complementary Index
- Journal :
- Journal of Finance (Wiley-Blackwell)
- Publication Type :
- Academic Journal
- Accession number :
- 4652060
- Full Text :
- https://doi.org/10.1111/j.1540-6261.1988.tb03968.x