Photographer:Fotograaf: Harry Heuts
MAASTRICHT. 24 Student Prizes were awarded this year for the best master’s (9) and bachelor’s (15) theses. Observant asked two of the winners to tell us more about their research.
A business that is in need of money, can do two things. It either issues shares (equity financing), or contracts a loan (debt financing). That last option seems the smartest from a tax point of view. Interest can be deducted from the profits (leaving less income to pay tax on), but not the dividend paid out to shareholders. Bram Bemelen, now a master's student of Fiscal Economics, shows in his bachelor's thesis that it is not as simple as it appears.
“There are still a few snags, which means that opting for debt financing is not the most profitable option in every situation. To start off, the amount of interest that you can deduct is limited by a number of things. Anti-abuse regulations by the government, other deductions, and your own income. Imagine you earn 1 euro, because of other deductions you are allowed to subtract 50 cents. Then it is great that you are allowed to subtract another 1-euro interest, but that is not much good to you. There is only 50 cents left, you can't lower the tax burden any more than that.”
At the same time, you are also increasing the risk of bankruptcy by accepting so much loan capital. “Profits always fluctuate. The more debts you have, the worse it is when the profits fall short. You still have to pay your interest. Managers must take that into account, just like the personal situation of investors – maybe they won't want to give a loan just now. Income out of interest is usually heavier taxed than income out of dividend.”
Bemelen was surprised by the news that he had won a Student Prize. “But in a pleasant way. It gave me a positive boost to start on my master's thesis.”
A shabby or fancy office?
Why are some leaders charismatic and others not? Books have been filled about that topic, but work and organizational psychology alumna Leonie Hentrup (see picture, second from the left) wondered what the influence of environment on charisma was. “Would an awe-inspiring background, say a fancy office, make people more charismatic?”
Hentrup conducted three studies to find this out. First, she wrote stories about charismatic and non-charismatic leaders in both fancy and shabby environments and let her test audience read them. “Especially the leaders with the non-charismatic aspects benefitted from impressive surroundings.” Second, she showed subjects pictures of people against different backgrounds. “I did a pre-test with a neutral white background to see which people were considered charismatic. Then I Photoshopped them into different offices.” Again, non-charismatic people benefitted from the fancy office. For the third study, Hentrup asked an actress to give a speech in a charismatic and non-charismatic way; the test persons were shown the videos. “Here we saw a contrasting effect. The charismatic person benefitted from the shabby environment.”
Hentrup concluded that it is important to look at the context – “we saw a strong effect in all three studies” – but to know why exactly, more research is required. “A PhD student in my supervisor’s group is now looking into what changed in the video study. They keep me updated.” Didn’t she want to pursue a PhD herself? “I was really torn; I had so much fun writing my master’s theses. But I already had a job as a consultant when I graduated. I chose that, but keep a PhD in the back of my mind.”