Reply to "Comment on the value of tax shields is NOT equal to the present value of tax shields"

Pablo Fernandez ()

No D/579, IESE Research Papers from IESE Business School

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 (search for similar items in EconPapers)
JEL-codes: G12 G31 G32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-cfn
Date: 2005-01-15
View list of references View citations in EconPapers

Downloads: (external link)
http://www.iese.edu/research/pdfs/DI-0579-E.pdf (application/pdf)

Related works:
Journal Article: Reply to "Comment on the value of tax shields is NOT equal to the present value of tax shields" (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ebg:iesewp:d-0579

Access Statistics for this paper

More papers in IESE Research Papers from IESE Business School
Address: IESE Business School, Av Pearson 21, 08034 Barcelona, SPAIN
Contact information at EDIRC.
Series data maintained by Silvia Jimenez ().