Investment Valuation with Tax-optimized Financing Decisions and a Tax-optimized Default Alternative
AbstractIn this paper we evaluate an indivisible investment project that is carried out in a corporation under very simple premises. In particular, we discuss a one-period model with certainty, the pure domestic case and proportional tax rates. Surprisingly, the decision problem turns out to be rather complex if one has to make allowance for different taxation of the corporation and its owner. Altogether there are more than 10 cases that have to be distinguished if the firm's managers want to make a correct decision, depending on the relation of personal and corporate tax rates.
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Bibliographic InfoArticle provided by German Academic Association for Business Research in its journal BuR - Business Research.
Volume (Year): 1 (2008)
Issue (Month): 1 (May)
dividend distribution decisions; financing policy; investment decisions; payout policy; tax planning;
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- Louis Kaplow, 2006.
NBER Working Papers
12061, National Bureau of Economic Research, Inc.
- Lachmund, Andreas & Kiesewetter, Dirk, 2004.
"Wirkungen einer Abgeltungssteuer auf Investitionsentscheidungen und Kapitalstruktur von Unternehmen,"
278, University of Tübingen, School of Business and Economics.
- Kiesewetter, Dirk & Lachmund, Andreas, 2004.
"Wirkungen einer Abgeltungssteuer auf Investitionsentscheidungen und Kapitalstruktur von Unternehmen
[Effects of a flat rate tax on investment decisions and capital structure of companies]," MPRA Paper 27177, University Library of Munich, Germany.
- Kiesewetter, Dirk & Lachmund, Andreas, 2004. "Wirkungen einer Abgeltungssteuer auf Investitionsentscheidungen und Kapitalstruktur von Unternehmen
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