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Tax Bond Creation Using a Structural Model and its Extensions

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  • Suren Harutyunyan

Abstract

This article describes and explores taxes and debt in finance. Here a situation is thought about, where tax payments would qualify to be considered as debt. Using this principle we can infer that it is possible to create and price a type of bond (Tax Normalization Guarantee) for companies, which would allow them to enter in temporary tax breaks to allow them to free capital. Finally it is explored a way to structure these bonds in financial products and valuate them.

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  • Suren Harutyunyan, 2015. "Tax Bond Creation Using a Structural Model and its Extensions," Papers 1509.01218, arXiv.org.
    • Handle: RePEc:arx:papers:1509.01218
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    References listed on IDEAS

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    1. Black, Fischer & Cox, John C, 1976. "Valuing Corporate Securities: Some Effects of Bond Indenture Provisions," Journal of Finance, American Finance Association, vol. 31(2), pages 351-367, May.
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