TY  - JOUR
AU  - Majd,Saman
AU  - Myers,Stewart C.
TI  - Valuing the Government's Tax Claim on Risky Corporate Assets
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1553
PY  - 1985
Y2  - February 1985
UR  - http://www.nber.org/papers/w1553
L1  - http://www.nber.org/papers/w1553.pdf
N1  - Author contact info:
Saman Majd
230 Brookside Road
Darien
CT 06820
USA
Tel: 1 203 655 4987
Fax: 1 203 655 5473
E-Mail: saman@majd.us

Stewart C. Myers
Massachusetts Institute of Technology
Sloan School of Management
E62-620
77 Massachusetts Avenue
Cambridge, MA 02142
Tel: 617/253-6696
Fax: 617/258-6855
E-Mail: scmyers@mit.edu
AB  - This paper explores the effects of tax asymmetries on the value of risky capital investments made by corporations.The government's claim on the firm is shown to be equivalent to a portfolio of options on the firm's revenues. The tax law's provisions for carrying tax losses forward and backward are introduced, necessitating a numerical solution for the value ofthe government's claim. The results show that asymmetric taxation of operating gains and losses can significantly affect the after-tax net present value of corporate investment opportunities.
ER  -