Valuing the deferred tax liability
Article Abstract:
A model of corporate investment, where the deferred tax liability never makes a turnaround, demonstrates that deferred taxes are an actual economic burden. The market value of the tax liability is computed by multiplying the deferred tax multiplied by a fraction, the numerator of which is the tax depreciation rate and the denominator is the sum of the tax depreciation rate and the cost of capital. This model embraces stationarity of the production technology, corporate investment behavior, tax laws and financial accounting practices. It does not include the institutional characteristics of the tax law, such as tax credits, loss limitations, foreign taxes and the alternative minimum tax. Implications of this model are discussed.
Publication Name: Journal of Accounting Research
Subject: Business
ISSN: 0021-8456
Year: 1998
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The valuation of new contingent claims on the S&P 500 index
Article Abstract:
The average options and options on the extreme values are investigated. When applied to the S&P 500 index futures, these options demonstrate a behavior that is as desirable as that of actual options. Therefore, they can be used as effective hedging instruments or alternative investment vehicles. Already, these options are attracting a number of investors, including pension and mutual funds. It can therefore be said that the fine performance of these options can boost their probability of survival in the market.
Publication Name: Managerial Finance
Subject: Business
ISSN: 0307-4358
Year: 1995
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No discounting for claims or deferred tax provisions
Article Abstract:
Independent Insurance is a British company that offers general insurance, risk management and related services. Since its 1993 flotation, the company has included an actuary's review within its annual financial report, in order to reassure policyholders and shareholders regarding the report's provisions.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 2001
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