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oai:www.ideals.illinois.edu:2142/18948 2023-07-10 col_2142_16440 col_2142_5131 com_2142_16439 com_2142_9216 com_2142_5130

Restriction data tranferred 2014-07-01T11:12:29-05:00 Original Data Group with Access UIUC Users [automated] Release Date: none Reason: ETDs are only available to UIUC Users without author permission ETDs are only available to UIUC Users without author permission U of I Only AAI9329181 (UMI)AAI9329181 http://hdl.handle.net/2142/18948 eng Dietrich, J. Richard Terando, William David 2011-05-07T11:52:18Z 2011-05-07T11:52:18Z 10000-01-01 1993 "This dissertation examines whether taxes and other factors influence debt ratio differences between corporations and Master Limited Partnerships. Four explanations are presented which predict that MLPs will have different debt ratios than IPOs. The first explanation predicts that the deductibility of interest expense provides IPOs with more incentive, relative to MLPs, to include debt in their financial structure. The second explanation predicts that MLPs will have lower debt ratios than IPOs because of the business risk differences between Investment and Operating MLPs and the organizational structure differences between limited partnerships and IPOs. The third explanation predicts that MLPs will have lower debt ratios than IPOs because MLPs are likely to have relatively higher levels of asset-based tax shields. This is because MLPs can write up their assets to fair market value when their units are sold in secondary markets (IRC S 754). The fourth alternative explanation suggests that MLPs formed by ""high debt ratio"" firms will have relatively higher debt ratios than other MLPs (or IPOs) because of: (a) the non-tax costs associated with significantly reducing debt obligations (including pre-payment penalties, (b) the advantages to the general partner of holding debt within an MLP." This study shows that the deductibility of interest expense for tax purposes provides IPOs with more incentive than MLPs to include debt in their financial structure. However, it also suggests that MLPs have lower debt ratios than IPOs because Investment MLPs have lower debt ratios than Operating MLPs (and IPOs). This result is important because it suggests that previous studies may have overstated the importance of taxes in influencing debt ratio differences between MLPs and corporations by not also considering the distinction between Investment and Operating MLPs. As a result, policy makers who interpret MLP and corporate debt ratio differences as an indication of what would happen under an integrated tax system should evaluate these conclusions carefully. Made available in DSpace on 2011-05-07T11:52:18Z (GMT). No. of bitstreams: 2 license.txt: 4922 bytes, checksum: 910b249b4beec47e7ab768910c8f966f (MD5) 9329181.pdf: 4690241 bytes, checksum: 796a0f0b0d17d934cf2000f0fa5fc3e7 (MD5) Previous issue date: 1993 Item marked as restricted to the 'UIUC Users [automated]' Group (id=2) by Howard Ding (hding2@illinois.edu) on 2011-05-07T14:33:37Z Item is restricted indefinitely. Copyright 1993 Terando, William David Business Administration, Accounting The influence of taxes and other factors on debt ratio differences between Master Limited Partnerships and corporations text Department of Accountancy Accountancy University of Illinois at Urbana-Champaign Dissertation Ph.D.