Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/114496 
Year of Publication: 
2015
Series/Report no.: 
arqus Discussion Paper No. 191
Publisher: 
Arbeitskreis Quantitative Steuerlehre (arqus), Berlin
Abstract: 
This paper attempts to analytically determine the impact a tax shield (marginal tax rate) has on the value of a levered firm assuming that gains and losses are taxed differently. Previous research has done this by employing empirical methods and simulation studies. We are able to present closed-form solutions for two popular financing policies. Our solutions reveal that the marginal tax rate is a function with an order greater than one.
Document Type: 
Working Paper

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