Basic issues | p. 1 |
The real option approach | p. 3 |
Real call options | p. 5 |
A two-period model | p. 7 |
The threshold point | p. 8 |
Real put options | p. 10 |
Tax neutrality | p. 11 |
The Brown condition in a static context | p. 11 |
The Brown condition in a real option context | p. 12 |
An emerging literature | p. 13 |
The entrepreneurial decision | p. 15 |
The entrepreneurial choice without taxation | p. 18 |
The worker's value function | p. 19 |
The firm's value function | p. 20 |
Optimal start-up timing | p. 21 |
The start-up decision under taxation | p. 23 |
Entry and the option to quit | p. 27 |
Appendix | p. 33 |
The geometric Brownian motion | p. 33 |
The calculation of (2.3) | p. 36 |
The calculation of (2.5) | p. 38 |
An alternative approach to the optimal timing problem | p. 39 |
The calculation of (2.14) | p. 39 |
The choice of the organizational form | p. 41 |
MacKie-Mason and Gordon's (1997) model | p. 43 |
The option to incorporate | p. 45 |
The value functions | p. 46 |
The exercise of the option to incorporate | p. 48 |
Organizational neutrality | p. 50 |
Appendix | p. 51 |
The calculation of (3.4) | p. 51 |
The calculation of (3.6) | p. 53 |
The trigger point (3.10) | p. 53 |
Proof of proposition 2 | p. 54 |
The tax treatment of debt financing | p. 57 |
The standard model | p. 57 |
Default risk and optimal leverage | p. 61 |
The trade-off model | p. 64 |
The debt value | p. 66 |
The equity value | p. 67 |
The optimal coupon | p. 70 |
Financial strategies and tax avoidance | p. 71 |
Optimal income shifting | p. 77 |
The optimal capital structure | p. 78 |
Appendix | p. 82 |
Proof of proposition 5 | p. 82 |
Derivation of (4.32) | p. 83 |
Derivation of (4.33) and (4.36) | p. 85 |
The optimal coupon (4.39) | p. 87 |
Proof of proposition 7 | p. 87 |
Proof of proposition 8 | p. 88 |
Foreign Direct Investment and tax avoidance | p. 91 |
FDI activities and tax competition | p. 92 |
FDI and tax avoidance | p. 92 |
The effects of income shifting on tax competition | p. 97 |
The capital levy problem | p. 101 |
Appendix | p. 106 |
Proof of proposition 12 | p. 106 |
Policy issues | p. 107 |
Corporate tax base options | p. 109 |
The basic options | p. 109 |
The Nineties' tax proposals | p. 121 |
The US CBIT and the Italian IRAP | p. 121 |
The imputation methods | p. 126 |
Appendix | p. 133 |
Intertemporal neutrality of cash-flow taxation | p. 133 |
Broad or narrow tax bases? | p. 135 |
The standard approach | p. 135 |
A real-option perspective | p. 138 |
The MNC's strategy | p. 141 |
Appendix | p. 146 |
The MNC's present value (7.3) | p. 146 |
The MNC's option value (7.4) | p. 147 |
The calculation of (7.11) | p. 148 |
Proof of proposition 15 | p. 148 |
Proof of proposition 16 | p. 149 |
Risk-adjusted or risk-free imputation rate? | p. 151 |
The model | p. 152 |
Neutrality properties | p. 156 |
Full loss offset or no-loss offset? | p. 161 |
The role of tax loss offsets | p. 163 |
The symmetric scheme | p. 163 |
The asymmetric scheme | p. 165 |
Policy uncertainty | p. 168 |
The symmetric scheme | p. 170 |
The asymmetric scheme | p. 171 |
Some extensions | p. 172 |
Capital risk | p. 172 |
Incremental investment | p. 173 |
Sequential investment | p. 174 |
R-based or S-based taxation? | p. 177 |
The model | p. 178 |
The S-based system | p. 179 |
The value of debt | p. 180 |
The value of equity | p. 182 |
Neutrality results | p. 183 |
The R-based tax system | p. 187 |
Appendix | p. 189 |
The calculation of (10.2) and (10.3) | p. 189 |
The calculation of (10.7) | p. 191 |
Proof of proposition 19 | p. 191 |
Proof of proposition 20 | p. 192 |
Proof of proposition 21 | p. 194 |
Proof of proposition 22 | p. 194 |
Proof of proposition 23 | p. 195 |
Conclusions and topics for future research | p. 199 |
Review of main results | p. 199 |
Future research directions | p. 202 |
References | p. 205 |
Index | p. 227 |
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