This paper analyzes the combined effect of inflation and taxes on firm value, taking real growth of the firm's investment opportunities into account. Based on a simple model of the firm, our results highlight a hitherto neglected effect of real growth upon firm value. We find real growth,...

The tax shield as present value of debt-related tax savings plays an important role in firm valuation. Driving the risk of future debt levels, the firm's strategy to adjust the absolute debt level to future changes of the firm value, labeled as (re-)financing policy, affects the value of tax...

We examine how a bidder's failure to consummate a deal affects its subsequent M&As. After experiencing unconsummated M&As, firms choose smaller targets than before, more likely hire advisors, hire more advisors, and more likely make cash bids. Effects are strongest for bids directly succeeding...