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Investment Incentives and the Discounting of Depreciation Allowances
4 references·15 citing·43 second hop
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(1936)The Cost of Capital, Corporation Finance and the Theory of Investment (1958)Tax Spillovers from US Corporate Income Tax Reform (2018)Stock Repurchases and the 2017 Tax Cuts and Jobs Act (2019)Tax Policy and Investment in a Global Economy (2024)CAPITAL ASSET PRICES: A THEORY OF MARKET EQUILIBRIUM UNDER CONDITIONS OF RISK* (1964)The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets (1965)THE VALUATION OF RISK ASSETS AND THE SELECTION OF RISKY INVESTMENTS IN STOCK PORTFOLIOS AND CAPITAL BUDGETS**This paper is another in a series of interrelated theoretical and statistical studies of corporate financial and investment policies being made under grants from the Rockefeller Foundation, and more recently the Ford Foundation, to the Harvard Business School. The generous support for this work is most gratefully acknowledged. The author is also much indebted to his colleagues Professors Bishop, Christenson, Kahr, Raiffa, and (especially) Schlaifer, for extensive discussion and commentary on an earlier draft of this paper; but responsibility for any errors or imperfections remains strictly his own.[Professor Sharpe's paper, “Capital Asset Prices: A Theory of Market Equilibrium Under Conditions of Risk” (Journal of Finance, September 1964) appeared after this paper was in final form and on its way to the printers. My first section, which parallels the first half of his paper (with corresponding conclusions), sets the algebraic framework for sections II, III and VI, (which have no counterpart in his paper) and for section IV on the equilibrium prices of risk assets, concerning which our results differ significantly for reasons which will be explored elsewhere. Sharpe does not take up the capital budgeting problem developed in section V below.] (1975)Inside the Black Box: The Credit Channel of Monetary Policy Transmission (1995)Do Investment-Cash Flow Sensitivities Provide Useful Measures of Financing Constraints? (1997)Corporate financialization’s conservation and transformation: from Mark I to Mark II (2021)Monetary policy, customer capital, and market power (2021)Monetary policy uncertainty and corporate cash holdings: Evidence from China (2023)Common risk factors in the returns on stocks and bonds (1993)The economic implications of corporate financial reporting (2005)IPO price formation and board gender diversity (2024)The Capital Structure Puzzle (1984)The Determinants of Capital Structure Choice (1988)Which Effective Tax Rate? (1983)Tax Reform and the Cost of Capital (1991)EMPIRICAL STUDIES OF DEPRECIATION (1996)
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References

  • 1981Principles of Corporate Finance.3,634 cited
  • 1967Tax Policy and Investment Behavior1,703 cited
  • 1980Inflation-Proof Depreciation of Assets98 cited
  • 1986Tax Loss Carryforwards and Corporate Tax Incentives65 cited

Cited by

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  • 2022Presidential Address: Corporate Finance and Reality47 cited
  • 2020Why Isn’t Business Investment More Sensitive to Interest Rates? Evidence from Surveys45 cited
  • 2006A Retrospective Evaluation of the Effects of Temporary Partial Expensing43 cited
  • 2018Taxation and Investment Decisions in Petroleum31 cited
  • 2015Why Isn't Investment More Sensitive to Interest Rates: Evidence from Surveys27 cited
  • 2000Payback criterion, hurdle rates and the gain of waiting26 cited
  • 2025Corporate Discount Rates25 cited
  • 2022Do tax reductions stimulate firm productivity? A quasi-natural experiment from China23 cited
  • 2015Managerial Performance Evaluation and Real Options23 cited
  • 2023Corporate Discount Rates22 cited
  • 2002Taxation, Uncertainty, and the Cost of Equity

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21 cited
  • 1997Investment in new activities and the welfare cost of uncertainty20 cited
  • 2009Rent Taxation for Nonrenewable Resources18 cited
  • 2010Reasoning the ‘Net-Present-Value’ Way: Some Biases and How to Use Psychology for Falsifying Decision Models0 cited