Note On Taxes Corporate Financial Policy And the Cost of Capital to the Firm

Cover Note On Taxes Corporate Financial Policy And the Cost of Capital to the Firm
Note On Taxes Corporate Financial Policy And the Cost of Capital to the Firm
Donald Eugene Farrar
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Alternatively, should x/v of the company's shares be retired through open market purchases, each outstanding share's market value V" may be expected to increase pro- portionately; i. E. , V* = V(l + |) - V + x, as before. Hence, dividends and capital gains can be translated into one another, costlessly, in a tax free environment.
- 9 - composition, of total debt D* = D + D held against a particular operating c p income stream X, or for the manner in which disposable income is distributed by a f
...irm to its owners. As soon as corporate taxes

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