IESE Research Papers
Reply to "Comment on the value of tax shields is NOT equal to the present value of tax shields"
Abstract: The Comment is thought provoking and helps a lot in
rethinking the value of tax shields. However, the conclusion of Fieten,
Kruschwitz, Laitenberger, Löffler, Tham, Vélez-Pareja and Wonder (2005) is
not correct because, as will be proven below, the main result of Fernández
(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.
Keywords: Value of tax shields; present value of the net increases of debt; (follow links to similar papers)
JEL-Codes: G12; G31; G32; (follow links to similar papers)
8 pages, January 15, 2005
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to Silvia Jimenez ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design Joakim Ekebom