| Summary: | 碩士 === 中原大學 === 會計學系 === 88 === Tax is one of the factors that affect corporate financing decision and investment policy. Besides, The impact of tax on the value of firm and earnings are discussed in the finance literatures. By conventional wisdom, two types of tax rate are used to measure the tax status of firm. They are average tax rate and marginal tax rate（MTR）.Scholes and Wolfson（1992）consider that MTR is more appropriate than average tax rate to measure the relationship between corporate financing policy and taxes. However, the complicate computation of MTR leads the researchers have used statutory tax rate, effective tax rate or net operating loss dummy variable（NOL dummy）as its proxy.
In my study, first, simulate MTR of corporations in Taiwan Stock Exchange and Over the Counter market incorporating rules of the SFAS No.22 and the related tax laws. Seconds, examine the relationship between debt policy and MTR and other important factor considered by the current literatures. Third, study the marginal contribution of simulated MTR compared with that of other proxies, such as statutory tax rate, effective tax rate or NOL dummy. The empirical study results are shown below:
1.There is a significant positive relationship between simulated MTR and incremental debt issuance. This result is consistent with those by Mackie-Mason（1990）, Scholes, Wilson and Wolfson（1990）and Graham（1996）.
2.Although the significant positive relationship between Nondebt tax shields（NDTS）and incremental debt issuance contradicts to my hypothesis, it is consistent with that of Bradley, Jarrel and Kim（1984）.This result implies that the management is not willing to decrease the possibility of debt financing simply because of incremental corporation NDTS.
3.That the marginal contribution of using statutory tax rate and effective tax rate to incremental debt issuance is not significant respectively implies that the proxies of MTR may not appropriate.
4.The extra explanatory power to incremental debt issuance by using MTR is higher than using statutory tax rate and effective tax rate and NOL dummy.
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