Cash Distributions of Inflationary Gains |
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| Authors: | E. PETRI H. SHAWKY |
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| Affiliation: | E. Petri;and H. Shawky are Professor and Assistant Professor, respectively, in the School of Business, State University of New York at Albany, New York. |
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| Abstract: | When a firm maintains its debt/equity ratio, changes in expectations of inflation lead to windfall gains through the 'Fisher Effect'. Contrary to other studies, it is demonstrated here that the gain can be distributed to equity owners without impairing the firm's capacity to retire its debt. |
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| Keywords: | Inflation accounting Debt financing |
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