We examine whether tax avoidance of target firms affects takeover pricing. We find that acquirers pay lower premiums to tax aggressive targets, and this effect is concentrated in acquisitions of targets operating in less competitive industries that are prone to managerial agency problems and in...

In the 1995-2004 period, 48% of U.S. households owned stock assets, 11% owned private business assets, and 18% owned investment real estate other than a primary residence. These risky, high return investment assets accounted for 45% of household assets in the aggregate, even though 44% of...

The greater is the fraction of a firm's cash held overseas, the lower shareholders value that cash. This goes beyond a pure tax effect — the repatriation tax friction disrupts the firm's internal capital market, distorting its investment policy. Firms underinvest domestically and overinvest...