|
Based on your IP address, your paper is being delivered by:
|
 |
 |
 |
 |
 |
New York, USA
Processing request.
|
Illinois, USA
Processing request.
|
Brussels, Belgium
Processing request.
|
Seoul, Korea
Processing request.
|
California, USA
Processing request.
|
If you have any problems downloading this paper,
please click on another Download Location above, or
File name: SSRN-id1655244. ; Size: 119K
|
|
Cost of Capital with Levered Cost of Equity as the Risk of Tax Shields
Joseph Tham
Duke University - Duke Center for International Development in the Sanford School of Public Policy
Ignacio Velez-Pareja
Master Consultores
James W. Kolari
Texas A&M University - Department of Finance
December 25, 2010
Mays Business School Research Paper No. 2011-12
Abstract:
We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing perpetuities. In addition, it can be calculated without the circularity between value and discount rate.
The Spanish version of this paper can be found at http://ssrn.com/abstract=1684488.
Number of Pages in PDF File: 11
Keywords: Cost of levered equity, firm valuation, tax shields, discount rate for tax shields, risk of tax shields
JEL Classification: M21, M4, M46, M41, G12, G31, J33
working papers series
Download This Paper
Date posted: August 10, 2010
; Last revised: December 19, 2011
Suggested CitationTham, Joseph, Velez-Pareja, Ignacio and Kolari, James W., Cost of Capital with Levered Cost of Equity as the Risk of Tax Shields (December 25, 2010). Mays Business School Research Paper No. 2011-12. Available at SSRN: http://ssrn.com/abstract=1655244 or http://dx.doi.org/10.2139/ssrn.1655244
|
| Feedback to SSRN (Beta) |
|
|
Paper statistics
Download Rank:
|
28,550
|
People who downloaded this paper also downloaded:
1.
Capital Structure, Cost of Capital, and Voluntary Disclosures
By
Jeremy Bertomeu,
Anne Beyer, ...
2.
Corporation Income Taxes and the Cost of Capital: A Revision
By
James Kolari
and
Ignacio Velez-pareja
3.
Analytical Solution for Optimal Capital Structure in Perpetuities
By
Joseph Tham,
Ignacio Velez-pareja, ...
4.
Cálculo de Betas (Calculating Betas)
By
Ignacio Velez-pareja
5.
Cost of Capital and Value Without Circularity for Constant Growth Perpetuities
By
Felipe Mejia-pelaez
and
Ignacio Velez-pareja
6.
Optimal Capital Structure for Finite Cash Flows
By
Felipe Mejia-pelaez,
Ignacio Velez-pareja, ...
7.
Calculating Betas
By
Ignacio Velez-pareja
8.
Company Valuation in an Emerging Economy - Caldonia: A Case Study
By
Ignacio Velez-pareja
and
Joseph Tham
9.
Consistent Valuation of Project Finance and LBO's Using the Flows-to-Equity Method
By
Ian Cooper
and
Kjell Nyborg
10.
Costo de Capital con Costo del Patrimonio Apalancado Como el Riesgo de
los Escudos Fiscales (Cost of Capital with Levered Cost of Equity as the Risk of Tax Shields)
By
Joseph Tham,
Ignacio Velez-pareja, ...
|
|
|
|
