We extend the WACC approach to a tax system having a firm income tax and a personal income tax of the investor as well. We use an artificial tax system incorporating most of the G-7 national tax codes as for example the classical or the imputation systems. On our website (www.wacc.de) WACC...

Valuation of firms is generally based on the WACC approach which typically neglects personal income taxes. This paper extends this approach to incorporate personal income taxes and develop a generalized valuation formula which can be used for any taxation system. The approach is illustrated for...