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...

The German "Zinsschranke" limits the tax deductability of interest expenses. Recently, in this journal Förster et al. have developed a model to incorporate this tax regulation into the calculation of the tax shield in corporate valuation. Our paper critically comments on this proposal. --...

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...