Optimal Investment and Financial Strategies Under Tax Rate Uncertainty

In this paper we apply a real-option model to study the effects of tax rate uncertainty on a firm's decisions. In doing so, we depart from the relevant literature, which focuses on fully equity-financed investment projects. By letting a representative firm borrow optimally, we show that debt finance not only encourages investment activities but can also substantially mitigate the effect of tax rate uncertainty on investment timing

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Year of publication:	2010
Authors:	Fedele, Alessandro
Other Persons:	Panteghini, Paolo M. (contributor) ; Vergalli, Sergio (contributor)
Publisher:	[2010]: [S.l.] : SSRN
Subject:	Theorie \| Theory \| Entscheidung unter Unsicherheit \| Decision under uncertainty \| Kapitalstruktur \| Capital structure \| Steuertarif \| Tax rate

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Extent:	1 Online-Ressource (34 p)
Series:	FEEM Working Paper ; No. 68.2010
Type of publication:	Book / Working Paper
Language:	English
Notes:	Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 21, 2010 erstellt
Other identifiers:	10.2139/ssrn.1627989 [DOI]
Classification:	H2 - Taxation, Subsidies, and Revenue
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10013141996