Abstract

http://ssrn.com/abstract=636901
 
 

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Comment on 'The Value of Tax Shields is NOT Equal to the Present Value of Tax Shields'


Paul Fieten


Ernst & Young, The Netherlands

Ignacio Velez-Pareja


Master Consultores

Lutz Kruschwitz


Free University of Berlin (FUB) - Department of Business and Economics

Jörg Laitenberger


University of Hannover - Economics and Business Administration Area

Andreas Loeffler


Freie Universität Berlin

Joseph Tham


Duke University - Duke Center for International Development in the Sanford School of Public Policy

Nicholas X. Wonder


Western Washington University - College of Business & Economics


Quarterly Review of Economics and Finance, Vol. 45, February 2005

Abstract:     
Fernandez (2004) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect.

Keywords: Present value of tax shield, perpetuities

JEL Classification: G31, G32, H43

Accepted Paper Series





Not Available For Download

Date posted: December 30, 2004  

Suggested Citation

Fieten, Paul and Velez-Pareja, Ignacio and Kruschwitz, Lutz and Laitenberger, Jörg and Loeffler, Andreas and Tham, Joseph and Wonder, Nicholas X., Comment on 'The Value of Tax Shields is NOT Equal to the Present Value of Tax Shields'. Quarterly Review of Economics and Finance, Vol. 45, February 2005. Available at SSRN: http://ssrn.com/abstract=636901

Contact Information

Paul Fieten (Contact Author)
Ernst & Young, The Netherlands ( email )
Postbus 488
Rotterdam, 3000 AL
Netherlands
Ignacio Velez-Pareja
Master Consultores ( email )
Ave Miramar # 18-93 Apt 6A
Cartagena
Colombia
+575 690 9972 (Phone)
HOME PAGE: http://cashflow88.com/decisiones/decisiones.html
Lutz Kruschwitz
Free University of Berlin (FUB) - Department of Business and Economics ( email )
Boltzmannstrasse 20
D-14195 Berlin, 14195
Germany
+49 30 838-54631 (Phone)
+49 30 838-54468 (Fax)
Jörg Laitenberger
University of Hannover - Economics and Business Administration Area ( email )
Koenigsworther Platz 1
30167 Hannover
Germany
+49-511-7624668 (Phone)
+49-511-7624670 (Fax)
Andreas Loeffler
Freie Universität Berlin ( email )
Boltzmannstr. 20
Berlin, 14195
Germany
HOME PAGE: http://www.andreasloeffler.de
Joseph Tham
Duke University - Duke Center for International Development in the Sanford School of Public Policy ( email )
Box 90312
302, Towerview Dr, Rubenstein Hall, Room 272
Durham, NC 27708
United States
919-613-9234 (Phone)
919-681-0831 (Fax)
HOME PAGE: http://fds.duke.edu/db/Sanford/faculty/thamjx
Nicholas X. Wonder
Western Washington University - College of Business & Economics ( email )
Department of Finance and Marketing
Bellingham, WA 98225-9071
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