haku: @author Cheung, J. K. / yhteensä: 5
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| Tekijä: | Cheung, J. K. Heaney, J. |
| Otsikko: | Tax-induced effects on the firm's capacity decision. |
| Lehti: | Journal of Business Finance and Accounting
1992 : APR, VOl. 19:3, p. 425-438 |
| Asiasana: | TAXATION OPTIONS DECISION ANALYSIS CAPACITY DECISION MAKING |
| Kieli: | eng |
| Tiivistelmä: | The paper re-examines the issue of firm's capacity decision by taking corporate taxation into consideration. Specifically, it considers the impact of an asymmetric tax structure on the capacity decision, where the firm's tax liability is like a call option on the firm's assets. Assuming management's objective is to maximize firm value, we show that both business risk and riskless rate have a negative effect on the firm's optimal capacity via the tax liability, while debt financing and the tax depreciation rate have a positive effect. |
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