Optimal investment and financial strategies under tax rate uncertainty

In this paper we apply a real-option model to study how tax rate uncertainty affects a firm's decisions about both the timing and the source of finance of an investment project. We show that debt finance (i) encourages entry and (ii) mitigates the e¤ect of tax rate uncertainty on entry timing.

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Year of publication:	2009
Authors:	Fedele, Alessandro ; Panteghini, Paolo ; Vergalli, Sergio
Institutions:	Dipartimento di Economia e Management, Università degli Studi di Brescia

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Series:	Working Papers.
Type of publication:	Book / Working Paper
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008556958