Comment on 'the Value of Tax Shields is Not Equal to the Present Value of Tax Shields'
Posted: 30 Dec 2004
Fernandez (2004) claims to derive a formula for the valuation of debt tax shields for firms with cash flows that grow perpetually at a constant rate. We show that his formula is incorrect.
Keywords: Present value of tax shield, perpetuities
JEL Classification: G31, G32, H43
Suggested Citation: Suggested Citation