We are interested in the effect of capital income taxes upon security prices when investors face locally segmented stock markets and a global bond market. Therefore, we analyze an equilibrium model of an economy with binomial uncertainty, an exogenous risk-free interest rate and a representative...

We are interested in the effect of capital income taxes upon security prices when investors face locally segmented stock markets and a global bond market. Therefore, we analyze an equilibrium model of an economy with binomial uncertainty, an exogenous risk-free interest rate and a representative...

In his recent article quot;Valuation with or without personal income taxesquot; Richter analyzes the impact of introducing income taxes into the calculus of corporate valuation. His major result is that, if correctly specifying the model, the income tax rate is only of minor importance for...

Based on an example Loffler claims in his recent paper quot;Miles-Ezzell's WACC Approach Yields Arbitragequot;, that the application of the Miles/Ezzell-WACC may offer arbitrage opportunities. He concludes that the Miles/Ezzell-WACC is not applicable without restrictions. We discuss the example...