Talk:Tax shield
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Usage
Is it appropriate word usage to describe a tax write-off as a "tax shield"? Aaronchall (talk) 03:25, 8 February 2010 (UTC)
inappropriate signage
Tax shield edited and described as interest on debt x tax rate chen
incomplete sentence
in this paragaraph we dont think so that is l —Preceding unsigned comment added by 59.94.96.220 (talk) 07:43, 26 August 2008 (UTC)
tax shields simply do NOT exist
business values result from a comparison with a peer: consequently, if taxation of the FCF / interest is equal to its peer, tax burden (FCF) and tax savings (interest expense) cannot create any value: e.g. in case A, value of FCF is 100 : 10% (before tax) = 80 : 8% (after tax) = 1.000 each. in case B, provided that the business valued as well as its peer both have deductible interest, value of debt must be 4.000 (320 : 8% = 256 : 6%)with equity value being 5.000 less 4.000 = 1.000 (instead of 1.800)and levered equity cost = 14,4% (144 / 1.000) instead of 8% (144 / 1.800). Kai udo pawelzik (talk) 18:56, 26 July 2013 (UTC)
Kai Udo Pawelzik, Simplification of business valuation without Tax shields, CorporateFinance biz, 2013, page 261