The Marginal Source of Finance

This paper addresses the ongoingdebate on which view of equity, traditional or new, that best describes firm behavior. According to the traditional view, the marginal source of finance is new equity, whereas under to the new view, marginal financing comes from retained earnings. In the theoretical part, we set up a model where the firm faces a cost of adjusting the dividend level because of an aggravated free cash flow problem. The existence of such a cost - which has been used in arguing the traditional view - does not invalidate the core of the new view, namely that the marginal investment may be financed with retained earnings. The combination of costly changes in dividends and retained earnings as the marginal source of funds actually defines an extended new view of equity. In the empirical part, we test the implication of the new view that dividends and investments are negatively related. The overall conclusion is that the implication of the new view is supported for traded Swedish firms during 1980-98.The traditional view of equity; the new view of equity; financing policy; payout policy

Mitigating Double Taxation in an Open Economy

The interaction of various methods of mitigating economic and international double taxation of corporate source income is studied within a standard neoclassical model of firm behavior. The main purpose is to determine to what extent methods effective in mitigating economic double taxation in a closed economy remain useful in an open economy where the firm's marginal investor is a foreigner. While a cut in the statutory corporate tax rate invariably reduces the cost of capital, the impact of the imputation and split rate systems is shown to depend on whether the credit or exemption method is used in mitigating international double taxation, and the precise design of these methods.Corporate taxation; double taxation; cost of capital; open economy

The Equity Trap, the Cost of Capital and the Firm’s Growth Path

This paper reconsiders Sinn’s (1991) nucleus theory of the corporation by comparing two different regimes for the equity trap. In the first of these, all cash paid to the shareholders is taxed as dividends, in the second, shareholders are allowed a tax-free return of capital contributed through new issues. A substantial difference is found between the regimes in the size of initial equity injections, although in both regimes, no dividends are paid until a new long-run equilibrium is reached. Contrary to Sinn, we find that with optimal behavior, the cost of new equity is lower than suggested by conventional formulae.dividend taxation, equity trap, cost of capital, nucleus theory, growth path

Dividend Taxation, Share Repurchases and the Equity Trap

This paper reconsiders the effects of dividend taxation. Particular attention is paid to the form of the “equity trap”, that is, the extent to which cash paid to the shareholders must be taxed as dividends. Our analysis shows that Sinn’s (1991) criticism of the well-known King and Fullerton (1984) methodology for underestimating the cost of new share issues amounts to a misleading comparison across two different regimes for the equity trap. Contrary to Sinn, we find that when dividends are paid following a new issue, as assumed by King-Fullerton, the cost of capital is higher than is the case when no dividends are paid.dividend taxation, share repurchases, equity trap, cost of capital, nucleus theory, growth path

The use of historical collections to estimate population trends: a case study using Swedish longhorn beetles (Coleoptera: Cerambycidae)

Long term data to estimate population trends among species are generally lacking. However, Natural History Collections (NHCs) can provide such information, but may suffer from biases due to varying sampling effort. To analyze population trends and range-abundance dynamics of Swedish longhorn beetles (Coleoptera: Cerambycidae), we used collections of 108 species stretching over 100 years. We controlled for varying sampling effort by using the total number of database records as a reference for non-red-listed species. Because the general frequency of red-listed species increased over time, a separate estimate of sampling effort was used for that group. We observed large interspecific variation in population changes, from declines of 60\% to several hundred percent increases. Most species showed stable or increasing ranges, whereas few seemed to decline in range. Among increasing species, rare species seemed to expand their range more than common species did, but this pattern was not observed in declining species. Historically, rare species did not seem to be at larger risk of local extinction, and population declines were mostly due to lower population density and not loss of sub-populations. We also evaluated the species' declines under IUCN red-list criterion A, and four currently not red-listed species meet the suggested threshold for Near Threatened (NT). The results also suggested that species' declines may be overlooked if estimated only from changes in species range

Economic Effects of Taxing Closed Corporations under a Dual Income Tax

Under the Nordic dual income tax system, the taxpayer's total tax bill depends not only on his total income but also on the division of that income between capital income and labor income. This has created new room for tax avoidance, especially for active owners of (closed) corporations. For that reason the Nordic governments have enacted special income-splitting rules and this paper examines the economic effects of these rules. The Swedish scheme of taxing closed corporations is shown to be neutral in its impact on the allocation of resources between closely and widely held corporations, and the cost of capital is invariant to the rate at which capital income is imputed to the owner. The Finnish system rather increases the attractiveness of investing in closed corporations, while the Norwegian scheme may or may not cause the cost of capital to be different from that of widely held corporations. Finally, for Swedish tax rules, we show that the owner's labor supply may decrease as a response to a more lenient tax treatment.Dual income taxation; Tax avoidance; Corporate taxation; Cost of capital

Method for pressure and flow calculations of a 5GDHC grid with bidirectional energy flow and non-directional medium flow

Metod för tryckneräkningar av 5GDHC nät

Methods of Mitigating Double Taxation

This paper presents a comprehensive overview of existing methods of mitigating double taxation of corporate income within a standard cost of capital model. Two of the most well-known and most utilized methods, the imputation and the split rate systems, do not mitigate double taxation in corporations where the marginal investment is financed with retained earnings. However, all methods are effective when the marginal investment is financed with new share issues. The corporate tax rate, fiscal allowances, allocation to periodization funds and allocation to tax equalization reserves (or allowance for corporate equity) are effective instruments, independent of the sources of financing. The paper also discusses why so many different methods have been employed in mitigating double taxation.Corporate Taxation; Double Taxation; Cost of Capital

Röjningsstrategiers effekt på stubbskottsutveckling och granmedelhöjd i blandbestånd av gran och björk

Olika röjningsstrategier förväntas påverka stubbskottsbildning hos röjstubbar av vårtbjörk (Betula Pendula Roth) och glasbjörk (Betula Pubescens Ehrh), men relativt få studier har gjorts på området, varför det finns utrymme för vidare forskning. Det huvudsakliga syftet med den här uppsatsen var att undersöka skillnaderna i stubbsskottsutveckling till följd av olika röjningsstrategier. Detta gjordes genom ett fältförsök. Försöket utgjordes av ett randomiserat blockförsök på tre olika lokaler i södra Sverige, tre år efter röjningsbehandling. Det kontrollerades därtill om röjningsstrategi hade någon effekt på höjdutvecklingen hos huvudstammar av gran (Picea abies L.Karst). Resultatet visade att vårtbjörkens stubbskott var i genomsnitt 0,17 m lägre i skärmröjning, jämfört med totalröjning, och att skillnaden var signifikant. Trender som inte uppvisade signifikanta samband observerades mellan röjningsstrategi och stubbskottshöjd, medelantal stubbskott per stubbe och granmedelhöjd. För att skapa en tydligare bild av de olika röjningsstrategiernas effekt på björkstubbskott och granhuvudstammar föreslås att framtida studier har ett större dataunderlag, genomförs över en längre tid och att data rörande ståndortegenskaper inkluderas i beräkningarna.Different pre-commercial thinning (PCT) strategies are expected to affect the formation of stump sprouts from birch stumps of both silver birch (Betula Pendula Roth) and downy birch (Betula Pubescens Ehrh), but relatively few studies have looked into this, and therefore there is a need for a greater understanding. Thus, the main purpose of this paper was to investigate the differences in stump sprouts responses to the different PCT treatments. This was done through a field trial which used a randomized block design applied to three different test sites in southern Sweden, and the data was collected three years after the PCT strategies were performed. In addition to examining the effect of the PCT strategies on the height and number of the stump sprouts, the impact on the height development of the main stems of Norway spruce (Picea abies L.Karst) was analyzed. The results showed that the mean height of the silver birch stump sprouts was 0.17 m lower in the PCT-mix treatment than it was in the PCT-total treatment. This difference was statistically significant. Statically non-significant trends between PCT treatment and stump sprout height, mean number of stump sprouts per stump and mean spruce height were observed. To better be able to determine the effects of the PCT strategies on birch stump sprouts and spruce main stems, it is suggested that future studies would benefit from a larger dataset, longer time frame and that information regarding locality factors is included in the calculations