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29-05-2017 | Comment

Discussion of “Valuing the Tax Shield Under Asymmetric Taxation”

Author: Ulrich Schäfer

Published in: Schmalenbach Business Review | Issue 1/2018

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Abstract

Lutz Kruschwitz and Andreas Löffler analyze the effect of asymmetric taxation on the effective tax shield ratio of a firm. In the following note, I summarize and critically discuss their results based on a (slightly generalized) version of their model.

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A more elaborate analysis of loss carry-forward schemes must account for the specific rules and particularly for the risk of not being able to realize all tax benefits because of consecutive losses. The purpose of this simplified analysis is to provide some intuition for the expected effects.

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Title: Discussion of “Valuing the Tax Shield Under Asymmetric Taxation”
Author: Ulrich Schäfer
Publication date: 29-05-2017
Publisher: Springer International Publishing
Published in: Schmalenbach Business Review / Issue 1/2018
Print ISSN: 1439-2917
Electronic ISSN: 2194-072X
DOI: https://doi.org/10.1007/s41464-017-0032-0

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