Taxation Case Studies

This note provides an interactive illustration of Modigliani-Miller theory of the boards of tax debt levered firm value. Students must evaluate (1) the impact of hypothetical changes in the capital structure on firm value, and (2) the impact of large-scale recapitalization of the company’s share price by a set of Koppers partial sheet. After completing […]

This note explores the interaction between the use of debt and the value of the company and a brief look at the use of debt. It also introduces the concept of financial and operating leverage. In addition, it covers the impact of the use of debt in the presence of no taxes, corporate taxes only, […]

Connecticut wants to raise $ 325 million of long-term fixed-rate debt. One option is to make it synthetically – issue long-term variable rate debt and enter into interest rate swaps. The fact is, a means to analyze the various floating rate structures and different types of swaps. Also raises issues related to the risk of […]

Capital budgeting problem is considered from the context of dealer trying to make a sale of energy-efficient heavy industrial equipment. Changes in tax law promises a significant impact on the decision making process of the customer. Teaching aim: to surround solution of capital budgeting difficulties often encountered in the real decision-making. These include taxes, inflation […]

Wholly owned subsidiary of Lockheed Corporation has a $ 11 million expansion underway in South Carolina. The company must decide how best to take this opportunity to issue tax exempt debt. In particular, the solution includes a choice as to repayment and redemption structure is proposed. Designed to enable students to isolate the tax shields […]