Business, Management and Accounting
4 years ago

Optimizing debt allocation can slash multinational firms' after-tax costs significantly.

Financing and Valuation of a Marginal Project by a Firm Facing Various Tax Rates
Axel Pierru

Paper Summary

A multinational firm can save money on debt costs by spreading it out wisely among its projects in different tax environments. By using a special formula, they can figure out the value of a new project by looking at its expected cash flows and tax benefits. This method helps them make better financial decisions and expand their business efficiently.

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