This book provides a comprehensive overview of the implications of tax avoidance for a firm’s capital structure, highlighting the key role played by free cash flow and agency conflicts. First, the book provides an outline of the theories and empirical evidence concerning the role of taxes in...

Based on a case study firm whose asset is an investment option, this paper focuses on the debt financing impact and the existence of agency conflicts regarding the option exercise on optimal investment decisions, optimal capital structure and option value. The investment opportunity which is a...