Optimal investment and financial strategies under tax rate uncertainty

Alessandro Fedele, Paolo Panteghini and Sergio Vergalli

Working Papers from University of Brescia, Department of Economics

Abstract: In this paper we apply a real-option model to study how tax rate uncertainty affects a firm's decisions about both the timing and the source of finance of an investment project. We show that debt finance (i) encourages entry and (ii) mitigates the e¤ect of tax rate uncertainty on entry timing.

Date: 2009
New Economics Papers: this item is included in nep-cfn, nep-ppm and nep-pub
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Related works:
Journal Article: Optimal Investment and Financial Strategies under Tax‐Rate Uncertainty (2011)
Journal Article: Optimal Investment and Financial Strategies under Tax-Rate Uncertainty (2011)
Working Paper: Optimal Investment and Financial Strategies under Tax Rate Uncertainty (2010)
Working Paper: Optimal Investment and Financial Strategies under Tax Rate Uncertainty (2010)
Working Paper: Optimal Investment and Financial Strategies under Tax Rate Uncertainty (2010)
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