Skip to main content
Article
An After Tax Valuation of Debt Instruments
Finance Faculty Works
  • Charles J. Higgins, Loyola Marymount University
Document Type
Article
Publication Date
1-1-2014
Abstract

The net present value of any loan at is own discount rate is shown to be zero in both pre tax and after tax worlds. This allows separation from any investment net present value analysis. Further, it simplifies the analysis and it is argued is appropriate even in weighted average cost of capital scenarios wherein the cost of capital equal to its own after tax discount rate and remains a zero in terms of its own net present value.

Publisher Statement

© 2014 Science and Education Publishing

Available online at http://pubs.sciepub.com/jfe/2/3/2


This work is licensed under a Creative Commons Attribution 4.0 International License.

Citation Information

Charles Higgins, “An After Tax Valuation of Debt Instruments.” Journal of Finance and Economics, vol. 2, no. 3 (2014): 67-69. doi: 10.12691/jfe-2-3-2.