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LLM dissertation_taxation on hybrid securities

LLM dissertation_taxation on hybrid securities

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Published by: z_xar1884 on Apr 17, 2010
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07/23/2014

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The holders of subordinated loans, perpetual debentures, or of instruments with interest deferral term

are normally compensated for an extra risk by a higher yield than holders of traditional debt securities.

Therefore, it is essential for investors to purchase hybrid securities issued by high-grade companies

which are less likely to default.34

In reality, companies issuing hybrids can avoid paying such a high

return to outside investors by acquiring loans with such terms from major shareholders and parent

companies.

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