Valuation and Cost of Capital Formulae with Corporate and Personal Taxes: A Synthesis Using the Dempsey Discounted Dividends Model

2003 ◽  
Author(s):  
Michael J. Dempsey
Keyword(s):  
Cost Of Capital ◽  
Personal Taxes

VALUATION, TAX SHIELDS AND THE COST-OF-CAPITAL WITH PERSONAL TAXES: A FRAMEWORK FOR INCORPORATING TAXES

2004 ◽  
Vol 07 (06) ◽  
pp. 769-804 ◽  
Author(s):  
WOLFGANG SCHULTZE
Keyword(s):  
Tax Reform ◽  
Cost Of Capital ◽  
Tax System ◽  
Personal Taxes ◽  
International Environment ◽  
Tax Shields ◽  
The Cost ◽  
Relevant Cost

This paper presents a general approach to deriving valuation models and the relevant cost of capital formulas independent of a particular tax environment. The value of a levered firm depends to a large extent upon the amount and value of the tax shields. The latter in turn differs from country to country and even from firm to firm, depending on its particular situation. It is subject to change with every change in the tax system of the country where the firm is located. Therefore, in an international environment a general approach is needed, which can be altered for any given situation. At the same time personal taxes play an increasing role in the valuation of companies. Therefore, their consideration is integrated into the models derived. Finally, the resulting generalized versions of the Modigliani/Miller- and Miles–Ezzell-Formulas for adjusting the cost of capital to changes in leverage are applied to the situation of a corporation located in Germany after the Tax Reform Act of 2000.

Formation Of An Estimate For A State Contract With A Firm Price In The Construction Sector

2020 ◽  
pp. 47-57
Keyword(s):  
Construction Projects ◽  
Cost Of Capital ◽  
Federal Budget ◽  
The State ◽  
Structural Elements ◽  
Construction Sector ◽  
Construction Process ◽  
Practical Application ◽  
Stage Of Development ◽  
Capital Construction

The issues of determining the estimated cost of capital construction projects with the involvement of Federal budget funds at the stage of development of project documentation, during verification of the accuracy of determining the estimated cost and the initial (maximum) contract price are considered. On the basis of the assessment of amendments to urban planning legislation for the purpose of implementing a state contract by the contractor ( based on the results of competitive procedures or without competitive procedures by decision of state authorities), the procedure for forming the estimate as part of a state (municipal) contract, the price of which is firm, is presented. For the purpose of mutual settlements between the customer and the contractor for the work performed, the formation of primary accounting documentation, as well as for checking the work performed by regulatory authorities, an example of drawing up an estimate of the state (municipal) contract on the basis of grouping costs according to structural elements and complexes of work is given. The result of the research conducted was the development of regulations and the formation of criteria for their practical application by state bodies, institutions, organizations and other participants in the investment-construction process, as well as recipients of budget funds, who perform the functions of the state (municipal) customer, developer and technical customer.

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