Resource title

Differential Taxation and Corporate Futures-Hedging

Resource image

image for OpenScout resource :: Differential Taxation and Corporate Futures-Hedging

Resource description

Using a two-moment decision model this paper analyzes corporate hedging behavior in the presence of unified and differential income taxation. We start with the well-known result that risk-taking may increase when income tax rates increase and, therefore, the incentive for hedging reduces. We demonstrate that pure hedging is differently affected by taxation than speculative hedging is. Analysing tax-sensitivity of the corporate hedge shows that a higher risk in the first place may reduce the tax-induced incentive to revise a futures position.

Resource author

Jack E. Wahl, Udo Broll

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/22747

Resource license

Adapt according to the presented license agreement and reference the original author.