In an experiment, we model two stylized facts about capital budgeting practice, budgetary slack creation and delegationof decision-making authority. In our setting, under centralization, headquarters announces a budget, the divisionmanager gives a cost report, and headquarters decides on the...

This contribution addresses the substantial tax privilege for businesses introduced by the German InheritanceTax Act 2009. Advocates of the vast or even entire tax exemption for businesses stress the potentialdamage of the inheritance tax on businesses, as those often lack liquidity to meet tax...

This paper investigates the relationship between annual report disclosure, market liquidity, and capitalcost for firms registered on the Deutsche Börse. Disclosure is comprehensively measured using the innovativeArtificial Intelligence Measurement of Disclosure (AIMD). Results show that annual...

This study analyzes the accuracy of forecasted target prices within analysts’ reports. We compute a measurefor target price forecast accuracy that evaluates the ability of analysts to exactly forecast the ex-ante (unknown)12-month stock price. Furthermore, we determine factors that explain...

This paper describes a simple way to integrate the debt tax shield into an accounting-based valuation model. The market value of equity is determined by forecasting residual operating income, which is calculated by charging operating income for the operating assets at a required return that...