Revised Comment on 'The Value of Tax Shields is NOT Equal to the Present Value of Tax Shields'
7 Pages Posted: 25 Nov 2003
Date Written: November 21, 2003
In a forthcoming paper, Fernandez (2002) 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
Suggested Citation: Suggested Citation