In intra‐group finance hybrid instruments allow for tailor‐made form of finance. Hence hybrid finance is often used for international tax planning in multinational groups.Due to a lack of international tax harmonization or tax coordination qualification conflict can arise. A specific hybrid...

We discuss the combined effects of tax convexity, limited liability and leverage on risk-taking. First, we focus on a risk-averse investor who is indifferent to equity-finance a risky asset in a pre-tax setting. We derive the after-tax marginal prices for risk-averse investors. Symmetric...