Firm Valuation with Deferred Taxes: A Theoretical Framework

E. Amir, M. Kirschenheiter and K. Willard

Working Papers from Columbia - Graduate School of Business

Abstract: This paper proposes a method for valuing a firm's debt and equity that relies on readily-accessible current accounting data applied in an easily understood and intuitively appealing manner and which addresses the impact of a firm's accounting for taxes on a its economic profitability. We derive parsimonious expressions for the value of a firm's equity and debt in terms of current book values and future abnormal earnings which require no separate adjustments for deferred tax balances.

Keywords: DEBT; EQUITY; ACCOUNTING; TAXES (search for similar items in EconPapers)
JEL-codes: G32 H22 (search for similar items in EconPapers)
Pages: 41 pages
Date: 1997
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:colubu:97-13

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