The Choice of Tax Shields' Discount Rate on Firm Valuation

Language: English

Published by LAP LAMBERT Academic Publishing Mai 2016, 2016

3659869376 / 9783659869372

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This item is printed on demand - Print on Demand Titel. Neuware -The author observed that there is still no consensus regarding the tax shields' discount rates and found there a research topic. After reading in Luehrman (1997: 7) that 'Academics agree that tax shields, (.), should be discounted at an 'appropriate' risk-adjusted rate - that is, a rate that reflects riskiness. Unfortunately, they don't agree how risky tax shields are.' Luehrman after stating that 'A common expedient is to use the cost of debt as a discount rate', says that even if the company affords the interest payments, it might not realize the tax shields. Then claims that 'This suggests that tax shields are a bit more uncertain and so deserve a somewhat higher discount rate.' and in an ad hoc manner adds to the cost of debt 0.5% in order to obtain the rate that reflects the riskiness of tax shields. It was that controversy and this ad hoc solution of establishing the riskiness of tax shields that motivated her to search for a non-ad hoc solution for the computation of the tax shields' discount rate and the main reason for this research. To study this controversial topic it was necessary to study a problematic case: the valuation of Cruz Vermelha Portuguesa-SGH, S.A.VDM Verlag, Dudweiler Landstraße 99, 66123 Saarbrücken 96 pp. Englisch.

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Title
The Choice of Tax Shields' Discount Rate on Firm Valuation
Author
Ana Margarida Cordeiro Lopes
Publisher
LAP LAMBERT Academic Publishing Mai 2016
Publication year
2016
Condition
Neu
Binding
Taschenbuch
Language
English
ISBN 10
3659869376
ISBN 13
9783659869372
Item weight
161 grams
Dimensions
220x150x7 mm

buchversandmimpf2000

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