WACC and a generalized tax code

Sven Husmann, Lutz Kruschwitz and Andreas Loffler

The European Journal of Finance, 2006, vol. 12, issue 1, 33-40

Abstract: Valuation of firms is generally based on the WACC approach which typically neglects personal income taxes. This paper extends this approach to incorporate personal income taxes and develop a generalized valuation formula which can be used for any taxation system. The approach is illustrated for four different taxation systems highlighting the importance of considering personal taxes.

Keywords: WACC; tax shield; imputation system (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (1)

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DOI: 10.1080/1351847042000304125

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