Notional interest deduction and cost of equity reduction: An empirical application of the CAPM

Petitjean, Mikael;Taleb, Said
(2009) Revue bancaire et financière — Vol. 2-3, p. 178-185 (2009)

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Abstract
The goal of this paper is to determine whether the deduction for notional interests has led to a fall in the cost of equity. The empirical study is based on the Colmant and Hübner (2005) modified version of the Capital Asset Pricing Model (CAPM). We show that this fiscal measure has indeed led, on average, to a statistically significant decrease in the cost of equity for our sample of 30 public companies quoted on Euronext (Brussels).
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  • Louvain School of ManagementAccounting & Finance
  • FUCaMSciences de gestion

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Petitjean, M., & Taleb, S. (2009). Notional interest deduction and cost of equity reduction: An empirical application of the CAPM. Revue bancaire et financière, 2-3, 178-185. https://hdl.handle.net/2078.5/251048 (Original work published 2009)