Abstract

http://ssrn.com/abstract=646781
 
 

References (7)



 
 

Citations (9)



 


 



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


Pablo Fernandez


University of Navarra - IESE Business School

June 22, 2004


Abstract:     
The Comment is thought provoking and helps a lot in rethinking the value of tax shields. However, the conclusion of Fieten, Kruschwitz, Laitenberger, Loffler, Tham, Velez-Pareja and Wonder (2005) is not correct because, as will be proven below, the main result of Fernandez (2004) is correct for several situations.

Equation (16a) shows that the value of tax shields depends only upon the nature of the stochastic process of the net increase of debt.

Number of Pages in PDF File: 5

Keywords: Value of tax shields, Required return to equity, leverage cost, unlevered beta, levered beta

JEL Classification: G12, G31, G32

working papers series


Download This Paper

Date posted: January 11, 2005  

Suggested Citation

Fernandez, Pablo, Reply to Comment on the Value of Tax Shields is NOT Equal to the Present Value of Tax Shields (June 22, 2004). Available at SSRN: http://ssrn.com/abstract=646781 or http://dx.doi.org/10.2139/ssrn.646781

Contact Information

Pablo Fernandez (Contact Author)
University of Navarra - IESE Business School ( email )
Camino del Cerro del Aguila 3
28023 Madrid
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)
HOME PAGE: http://web.iese.edu/PabloFernandez/
Feedback to SSRN


Paper statistics
Abstract Views: 1,467
Downloads: 468
Download Rank: 33,290
References:  7
Citations:  9

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.282 seconds