Whether it Is Possible to Increase Taxing and Conserve a Good Investment Climate in the Country?

Peter Brusov, Tatiana Filatova and Natali Orekhova
Additional contact information
Tatiana Filatova: Financial University under the Government of Russian Federation
Natali Orekhova: Financial University under the Government of Russian Federation

Chapter Chapter 20 in The Brusov–Filatova–Orekhova Theory of Capital Structure, 2023, pp 401-417 from Springer

Abstract: Abstract Within investment models, developed by Brusov, Filatova, Orekhova earlier (Brusov et al., Appl Financ Econ 21 (11):815–824, 2011a, Res J Econ Bus ICT 2:16–21, 2011b, Res J Econ Bus ICT 2:11–15, 2011c; Appl Financ Econ 22 (13):1043–1052, 2012a, J Rev Glob Econ 1:106–111, 2012b; J Rev Glob Econ 2:94–116, 2013a, J Rev Glob Econ 2:183–193, 2013b; Cogent Econ Finance 2:1–13, 2014a, J Rev Glob Econ 3:175–185, 2014b; Filatova et al., Bullet FU 48:68–77, 2008) the influence of tax on profit rate on effectiveness of long-term investment projects at different debt levels is investigated. It is shown, that increase of tax on profit rate from one side leads to decrease in project NPV, but from other side it leads to decrease in sensitivity of NPV with respect to leverage level. At high leverage level L the influence of tax on profit rate increase on the effectiveness of investment projects becomes significantly less. We come to conclusion, that taxing could be differentiated depending on debt level of investment projects of the company: for projects with high debt level L it is possible to apply a higher tax on profit rate.

Keywords: Investment climate; Taxing; Efficiency of investments; Brusov–Filatova–Orekhova (BFO) theory; Modigliani–Miller theory; Debt financing (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
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: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-27929-4_20

Ordering information: This item can be ordered from
http://www.springer.com/9783031279294

DOI: 10.1007/978-3-031-27929-4_20

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().