Search Results - subject:"present value of the net increases of debt"

The value of tax shields depends only on the net increases of debt

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

of tax shields in a world with no leverage cost is the tax rate times the current debt plus the present value of the net … increases of debt. By applying this formula to specific situations, we show that Modigliani-Miller (1963) should be used when …

Persistent link: https://www.econbiz.de/10005106616

Valuing companies with a fixed book-value leverage ratio

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

on the present value of the net increases of debt. The value of tax shields in a world with no leverage cost is the tax … rate times the current debt plus the present value of the net increases of debt. We also show that the appropriate discount …

Persistent link: https://www.econbiz.de/10005021726

The value of tax shields is not equal to the present value of tax shields: A correction

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

with no leverage cost is the tax rate times the current debt, plus the tax rate times the present value of the net … increases of debt. The value of tax shields depends only on the nature of the stochastic process of the net increase of debt; it …

Persistent link: https://www.econbiz.de/10005021766

Reply to "Comment on the value of tax shields is NOT equal to the present value of tax shields"

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

The Comment is thought provoking and helps a lot in rethinking the value of tax shields. However, the conclusion of Fieten, Kruschwitz, Laitenberger, Löffler, Tham, Vélez-Pareja and Wonder (2005) is not correct because, as will be proven below, the main result of Fernández (2004) is correct...

Persistent link: https://www.econbiz.de/10005021785

Financial literature about discounted cash flow valuation

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

There is a wealth of literature about discounted cash flow valuation. In this paper, we will discuss the most important papers, highlighting those that propose different expressions for the value of the tax shield (VTS). The discrepancies between the various theories on the valuation of a...

Persistent link: https://www.econbiz.de/10005021801

The value of tax shields with a fixed book-value leverage ratio

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2005

of tax shields in a world with no leverage cost is the tax rate times the current debt plus the present value of the net … increases of debt. We develop valuation formulae for a company that maintains a fixed book-value leverage ratio and show that it …

Persistent link: https://www.econbiz.de/10005021816

Reply to "The value of tax shields is equal to the present value of tax shields"

Fernandez, Pablo - IESE Business School, Universidad de Navarra - 2004

In a recent paper, Cooper and Nyborg (2004) argue that the results of Fernández (2004) are wrong because value-additivity is violated and because "Fernández paper comes from mixing the Miles-Ezzell leverage policy with the Miller-Modigliani leverage adjustment." Cooper and Nyborg's paper is...

Persistent link: https://www.econbiz.de/10005021732