Farber, Gillet and Szafarz (2006) propose a general formula for the WACC in which the expected return on the tax shield appears explicitly. The classical Modigliani-Miller and Harris-Pringle WACC formulas for specific debt policies are then derived from the general formula after having...

Recent controversies testify that the tax shield valuation remains a hot topic in the financial literature. Basically, two methods have been proposed to incorporate the tax benefit of debt in the present value computation: The adjusted present value(APV), and the classical weighted average cost...

The recent financial problems are certainly partly due to the complexity of the standards used to value financial instruments, and to the difficulty met by regulatrs and accounting companies to verify the accounts of banks and other financial institutions. We sketch the main standards used and...