조세가 전환사채 발행 의사결정에 미치는 영향 = The Impact of Taxes on Determining Firm`s Issuing Convertible bond

다국어 초록 (Multilingual Abstract)

The purpose of this study is to analyze the tax effect to the decision making regarding convertible bond issue of the 570 non-financial companies which issued the convertible bond and straight bond. Among this study samples, the par-value interest of convertible bond were just about 20% of the straight bond and this result was not much different when we studied the whole convertible bond and straight bond. In addition, because the conversion right is embedded on convertible bond the par-value interest of convertible bond is lower than that of straight bond. The embedded option like conversion right etc. is not deducted as tax expense of issuing company but the par-value interest is deducted as expense under present tax, so the interest expense corporate tax shield of convertible bond is not big than that of straight bond. By the way, a point of view of investor to the convertible bond, because the conversion right which is a compensation of low par-value interest is not taxed and the par-value interest which is taxed as interest income is lower than that of straight bond, the convertible bond is better than the straight bond in tax expense of investors. In accordance with the paradigm of Scholes and Wolfson(1992), the company consider the tax effect to all parties who are concerned in not only company but also financial transaction for the efficient tax planning. Therefore, because company consider not only the corporate tax shield of issuing company but also the tax expense of investor to convertible bond and straight bond which effect to the company`s cost of capital when they make a financing decision making, the paradigm of Scholes and Wolfson(1992) can apply to the company`s issuing decision between convertible bond and straight bond. On the other hand, because the explicit tax benefit of convertible bond issuing company like interest expense corporate tax shield due to low par-value interest is lower than that of straight bond but implicit tax benefit as the reduction of cost of capital because of low tax expense in the investor step, company will make a issuing decision between convertible bond and straight bond if the other conditions are same. When the marginal tax rate of issuing company is lower, the marginal tax rate of investor is higher and issue a convertible bond instead of straight bond because the increasing of the implicit tax benefit of investor is higher than the decreasing of the explicit tax benefit, so the issuing incentive of convertible bond is higher than the issuing incentive of straight bond. In that this research framework, we assumed that the implicit tax benefit of investor step is regular on this study and we verified the effect of tax incentive to the issuing of convertible bond with focus on the explicit tax benefit of issuing company step. In addition to this, as concrete research methodology, we used the Logist Regression Analysis which used dummy variables that the convertible bond issuing company is 1, the straight bond issuing company is 0 as dependent variable. Through these we compared the tax incentive like marginal tax rate, non debt tax shield etc. with non -tax incentive like information asymmetric cost, financial distress cost, agency cost, and last resor financing vehicle etc. and verified the incentives to the issuing decision making of convertible bond on company. According to the results of empirical analysis, regarding the company select the resor financing vehicle when the marginal tax rate is lower and non debt-tax shield is smaller, the issuing possibility of convertible bond is higher than the issuing possibility of straight bond. This result can be analyzed that tax incentive like marginal tax rate have an important effect on the issuing decision making of convertible bond and this result imply that the non debt tax shield operated as debt securability effect rather than operated as substitution effect, so when the collaterals like tangible assets are small, the issuing possibility of convertible bond is higher than the issuing possibility of straight bond at decision making regarding financing by convertible bond or by straight bond. The distinctions of this study is that most of established prior studies of the inside and outside of the country regarding the incentive of issuing convertible bond focused on verifications of hypothesis base on agency cost and information asymmetry cost. On the other hand, this study are significant in point of analyzing directly the effect of the tax incentive`s effect on company`s issuing decision making between convertible bond and straight bond. In addition, the average and effective tax rate instead of marginal tax rate were used as the tax incentive of issuing convertible bond on most of established prior studies, but this study used the marginal tax rate and non debt-tax shield as proxy variable of tax incentive and in this point, this study much more developed the existing convertible bond issuing model which used the average tax rate. The results of these studies will contribute to not only the convertible bond issuing company and investors but also to the student of tax accounting as below. First, the company will select the optimal capital structure by assumption of real capital raising cost after taking into account the tax benefit and tax interest. Second, investors of convertible bond valuate the company which issues the convertible bond by assumption of after-tax money flow. Also, this study imply that the investor who have a convertible bond when they make a stock conversion`s decision, they should invest not only according to stock price level of issuing company but also according to after tax investment earing rate after taking into account the tax expense on interest income of redemption premium. On the other hand, these studies contribute to the other studies by combining the convertible bond issuance motive of Sholes and Wolfson(1992)`s tax accounting`s paradigm with capital structure study systematically. Finally, by the results of these studies imply that the tax authorities need to mitigate the tax discrimination according to difference of issuing security types when a company make a decision about the bond issuing by that the tax authorities need to apply to the recognition method and recognition timing of interest expense of convertible bond on the tax regulation should be applied to same method that the straight bond apply to accrual basis according to effective interest method.

참고문헌 (Reference)

• 1 고종권, "한계세율과 부채조달 의사결정" 한국회계학회 28 (28): 49-78, 2003
• 2 고윤성, "조세회피와 기업특성 및 기업가치에 관한 연구" 한국세무학회 24 (24): 9-40, 2007
• 3 전규안, "조세와 자본구조" 한국세무학회 21 (21): 67-96, 2004
• 4 문성훈, "전환사채에 대한 조건부 이자율 적용시 과세문제－ 상장조건부 상환할증금 과세를 중심으로－" 한국세무학회 25 (25): 113-137, 2008
• 5 윤영섭, "전환사채 발행유인에 관한 실증적 연구 -우리나라 제조업의 보통주 전환사채 발행을 중심으로" 한국경영학회 30 (30): 27-45, 2001
• 6 노현섭, "세무자료를 사용한 한계세울 대체 측정치의 평가" 한국회계학회 14 (14): 97-122, 2005
• 7 Ely, D. P, "“Taxes and the Choice of Issuing Preferred Stock vs. Debt”" 24 : 29-45, 2002
• 8 "http://www.ksd.or.kr"
• 9 "http://www.krx.co.kr"
• 10 "http://cafe.daum.net/cbbond"
• 11 Chang, S.-C, "Why Firms Use Convertibles: a Further Test of the Sequential-Financing Hypothesis" 28 (28): 1163-1183, 2004
• 12 Mayers, D, "Why Firms Issue Convertible Bonds?: the Matching of Financial and Real Investment Options" 47 (47): 83-102, 1998
• 13 Loncarski, I. H, "Why Do Companies Issue Convertible Bond? A Rivew of Theory and Empirical Evidence" Social Science Research Network 1-33, 2005
• 14 Simonyan,K, "Three Essays in Corporate Finance, Doctoral Dissertation" The Caroll Graduate School of Management. 2005
• 15 Manzon,G.B, "The Role of Taxes in Early Debt Retirement" 16 : 87-100, 1994
• 16 Smith, C, "The Investment Opportunity Set and Corporate Financing Dividend and Compensation Policies" 32 : 263-292, 1992
• 17 Demmon, R. M, "The Effect of Taxes on the Interaction between Production and Finance" 43 : 357-373, 1988
• 18 Suchard, J. A, "The Determinants of the Hybrid Security Issuance Decision for Australian Firms" 14 : 269-290, 2006
• 19 Dhaliwal, D., "Taxes, Investment-Related Tax Shields and Capital Structure" 52 : 179-194, 1992
• 20 Moon, S. H, "Taxes and Convertible Bons: Focusing on Issue and Conversion" University of Seoul 2009
• 21 Sholes, M. S, "Taxes and Business Strategy - A Planning Approach(2nd ed.)" Prentice Hall, 2002
• 22 Sholes, M. S, "Taxes and Business Strategy - A Planning Approach" Prentice Hall, 1992
• 23 Davidson Ⅲ, W. N. J. L. Glascock, "Signaling with Convertible Debt" 30 (30): 425-440, 1995
• 24 Ko, J. K, "Regulatory, Tax and Firm-specific Motivations for Issuing Preferred Stock vs. Long-term Debts" 32 (32): 1-29, 2003
• 25 DeAngelo, H, "Optimal Capital Structure under Corporate and Personal Taxation" 8 : 3-29, 1980
• 26 Mork, R, "Management Ownership and Corporate Performance: An Empirical Analysis" 20 : 293-315, 1988
• 27 Lewis, M., "Is Convertible Debt a Substitute for Straight Debt or for Common Equity?" 28 (28): 5-27, 1999
• 28 Green,R.C, "Investment Incentives, Debt, and Warrants" 13 (13): 115-136, 1984
• 29 Carter, M. E, "Evidence on the Role of Taxes on Financing Choice: Consideration of Mandatorily Redeemable Preferred stock" 18 (18): 103-114, 1995
• 30 Shelvin,T, "Estimating Corporate Marginal Tax Rates with Asymmetric Tax Treatment of Gains and Losses" 51-67, 1990
• 31 Jalan, P, "Equity Financing and Corporate Convertible Bond Policy" 19 (19): 187-206, 1995
• 32 Shackelford, D. A, "Empirical Tax Research in Accounting" 31 : 321-387, 2001
• 33 Mackie-Mason,J.K, "Do Taxes Affect Corporate Financing Decision?" 45 : 1471-1493, 1990
• 34 Graham,J.R, "Debt and the Marginal Tax Rate" 41 : 41-74, 1996
• 35 Stiglitz, J. E, "Credit Rationing in Markets with Imperfect Information" 393-410, 1981
• 36 Modigliani, F, "Corporate Income Taxes and Cost of Capital" 53 : 453-443, 1963
• 37 Stein,J.C, "Convertible Bonds as Backdoor Equity Financing" 32 (32): 3-21, 1992
• 38 Lee, H. W, "Characteristics of Firms that Issue Convertible Debt versus Convertible Preferred Stock" 39 : 547-563, 1999
• 39 Shim, D. S, "An Empirical Study on the Information Content of Private Placement of Convertible Bond" 24 (24): 371-398, 1999
• 40 Shin, S. M, "An Empirical Study on the Influence of Corporate Tax Burden on Capital Structure" 14 : 371-398, 1999
• 41 Lee, J. W, "A Study on Industry Condition, Growth Opportunities and Market Situations to Convertible Bond Design" Seoul National University 2004