This paper compares two attributes of a deferred tax liability (DTL) that arise from differences in book and tax depreciation methods. The first attribute is the effect of the DTL on the market value of the firm. The second is the length of time between when the asset is placed into service and...

This study examines the effect on firm value of repealing the last-in, first-out (LIFO) inventory method for tax purposes. Our model extends prior literature by determining quantities and prices in equilibrium rather than specifying them exogenously. We find that LIFO repeal could increase the...

We develop a model to investigate the relations among (1) corporate tax incidence, (2) tax capitalization, and (3) implicit corporate tax in a competitive equilibrium. The economic pretax return is independent of whether the incidence of the corporate tax is shifted from shareholders to...

This paper compares two attributes of a deferred tax liability (DTL) that arise from differences in book and tax depreciation methods. The first attribute is the effect of the DTL on the market value of the firm. The second is the length of time between when the asset is placed into service and...

We examine the current accounting controversy over dividend tax capitalization using a model in which we model explicitly the investment and dividend policies of the firm. We measure dividend tax capitalization using Tobin's q. Our analysis shows that the effect of dividend taxes on Tobin's q...

We incorporate fixed and variable costs into a cash flow based CAPM to investigate how each type of cost affects the cost of equity capital. A decrease in fixed costs always reduces cost of capital. With positive fixed costs, a decrease in the variable cost rate reduces cost of capital despite...

This paper develops a technique to infer the accuracy of analysts' forecasts of different components of earnings when databases contain forecasts of only bottom line (or limited component) earnings forecasts. We focus our analysis on three components - sales, operating profit percentage, and...

This article seeks to highlight significant U.S. federal income tax legislation in a manner that is useful to academics performing research in the field of finance. Taxes are a pervasive part of the current financial landscape, and as such it can be important for researchers to be aware of their...

I examine differences between effective tax rates (ETRs) and book-tax differences (BTDs) as alternative measures of corporate tax avoidance or tax aggressiveness. When BTDs are scaled by pretax income, the scaled BTD is statistically equivalent to the ETR. When BTDs are scaled by assets the...