Asymmetric Taxation Under Incremental and Sequential Investment
28 Pages Posted: 28 Jun 2002
Date Written: May 2002
This article discusses the effects of an asymmetric tax scheme on incremental and sequential investment strategies. The tax base is equal to the firm's return, net of an imputation rate. When the firm's return is less than this rate, however, no tax refunds are allowed. This scheme is neutral under both income and capital uncertainty.
Keywords: Corporate Taxation, Real Options
JEL Classification: H32
Suggested Citation: Suggested Citation