In his recent article quot;Valuation with or without personal income taxesquot; Richter analyzes the impact of introducing income taxes into the calculus of corporate valuation. His major result is that, if correctly specifying the model, the income tax rate is only of minor importance for...

Based on an example Loffler claims in his recent paper quot;Miles-Ezzell's WACC Approach Yields Arbitragequot;, that the application of the Miles/Ezzell-WACC may offer arbitrage opportunities. He concludes that the Miles/Ezzell-WACC is not applicable without restrictions. We discuss the example...

Cash holdings obviously play an important role in financial management of corporations: the largest firms in the world held 1.5 trillion USD in cash and marketable securities in 1998. Finance theory however has not dealt with this subject in detail until the mid 90's. Especially concerning the...

If a bidder launches a takeover offer for a listed company being part of a stock market index, then index funds and exchange traded funds (ETF) as shareholders of this company cannot easily tender their shares without losing track of the index. This paper analyzes the impact of index fund and...

This note draws on an important paper in venture capital financing theory. BERGLOuml;F (1994) stressed the important role of exit control and incorporated that issue in a model for optimal venture capital contract design. One major result of this work is that convertible debt strictly dominates...

This paper investigates the development of earnings quality for a sample of 5,817 firm years during the period between 1997 and 2006 using seven different measures (accounting- and market-based). As a result, overall earnings quality of German firms improves over time. However, the measures of...

In a recent contribution Jorg Wiese discusses the problem of how to adopt a version of the single-period Tax-CAPM of Brennan (1970) for multiperiod valuation problems. With this short note, we would like to demonstrate the following problems of Wiese's analysis:(1) the valuation calculus...

The German corporate governance system changed substantially over the last ten years. Meanwhile, ownership structures of German firms changed significantly. We examine the phenomenon of changing ownership structures by studying blockholdings of German large caps between 1997 and 2006. We examine...

Based on an example Loeffler claims in a recent FINANZ BETRIEB-article that the application of the Miles/Ezzell-WACC may offer arbitrage opportunities. He concludes that the Miles/Ezzell-WACC is not applicable without restrictions. We discuss the example of Louml;ffler and show that either (a)...

German Abstract: Im Rahmen der Unternehmensbewertung wird für die Ableitung der Eigenkapitalkosten von nicht börsennotierten Unternehmen die Anwendung von Branchen-Betas empfohlen. Wegen der Abhängigkeit des Beta-Faktors von der Kapitalstruktur ist eine Anpassung für ggf. vorhandene...