Eliminating the corporate interest tax deduction has the potential to dampen the growth and valuations of U.S. middle-market companies, new research from RGL Forensics, in partnership with ACG, contends.
RGL “has quantified the impact on the equity valuations of individual companies assuming the loss of the CIT deduction caused by resulting changes in the cost of capital and growth,” the firm reported on its website.
RGL based its research on a sample of 2014-2015 data collected from 835 middle-market public companies with $10 million to $1 billion in annual revenue.
The five sectors most affected by the loss of CIT are telecom services, health care, energy, consumer discretionary and materials industries, RGL said.
The study was addressed on Wednesday during a breakout session, “Tax Issues Affecting the Middle Market and PE Investments,” at InterGrowth 2016. Matt Morris, an RGL partner, was among the panelists.
For more information and to download the study, click here.