Financial decisions and taxes

Authors

  • György Andor
  • Tamás Tóth
https://doi.org/10.3311/pp.so.2006-1.02

Abstract

In the present paper we examine whether investment decisions and financial decisions can be separated. Our assumption is that if the amount of debt cannot cause any change of shareholder´s value, then the two kinds of decisions can be separated. But the effect of borrowing money is so arborescent, that the specifics could only be cached, represented in the Capital Asset Pricing Model´s (CAPM) word. With our novel approach we would also like to show a simple and widely useable tutorial method.

Keywords:

capital budgeting, taxation, tax shield, financial distresses, leverage, CAPM

How to Cite

Andor, G., Tóth, T. (2006) “Financial decisions and taxes”, Periodica Polytechnica Social and Management Sciences, 14(1), pp. 11–17. https://doi.org/10.3311/pp.so.2006-1.02

Issue

Vol. 14 No. 1 (2006)

Section

Articles