Windfall profits and losses accrue to investors only when expected after-tax returns or discount rates change, and major tax policy shifts are likely to alter these variables. This study introduces a cashflow valuation model for estimating the windfalls to owners of U.S. nonfinancial...

Windfall profits and losses accrue to investors only when expected after-tax returns or discount rates change, and major tax policy shifts are likely to alter these variables. This study introduces a cashflow valuation model for estimating the windfalls to owners of U.S. nonfinancial...

A new expression is derived in which the cost of capital is an explicit function of debt maturity structure and the underlying real asset cash flow stream. In special cases the cost of capital expression reduces to the standard weighted average cost of capital, but generally the standard...

Standard specification of marginal effective tax rate (METR) as expected pretax minus after-tax rates of return divided by pretax rate of return contains a fundamental flaw rendering the measure useless except in a few special cases. The current study exposes the flaw and introduces an...

Financing expenses for producers are necessary costs of business but for suppliers of financial capital these same cash flows represent a return on investment. The producer theory of value paradigm enables a specification for the cost of financial capital that satisfies a dynamic no-arbitrage...

This study analytically specifies the residual cash flow stream that real capital embodies. The specification separates debt cash flows from equity and obtains an equilibrium condition equating marginal physical product and real user cost of capital. Analysis of the user cost specification...

This study weds the user cost of capital with average period in a modern analytical relationship and offers three implications. One, a real capital stock's fundamental value as a proportion of its current replacement cost depends on a ratio of average periods. Two, the effect on fundamental...