If the tax code is convex and the forward rate equals the expected future spot rate, why would a firm prefer to pay taxes on the hedged value of a foreign currency cash flow rather than
wait to pay the taxes on the realized foreign currency cash flow?
In the presence of a convex tax code and if the forward rate equals the expected future spot rate, a firm would prefer to pay tax on its expected income with certainty rather than paying its expected tax by taking the probability weighted average of the taxes on possible incomes in the uncertain future states of the world. This is because hedging allows the firm to shift income across different states of the world. Increasing income in states with losses avoids the low subsidy rates, and thus hedging reduces expected taxes. This increases the firm's value.
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Developing and promoting a well-defined corporate code of conduct is related to which element of the fraud-fighting model?
a. Investigation & follow-up b. Education & training c. Tone at the top d. Proactive fraud detection
What is the difference between comparability and consistency?
Roderick possesses five hundred acres of forested property. Roderick has the right to use the land, in¬cluding cutting its timber, for life. Roderick also has the right to lease the land for a period not to exceed his life. This ownership interest is
a. a fee simple absolute. b. a leasehold estate. c. a life estate. d. an easement.
Well-known port 8 is used for ________
A) FTP file transfer B) ping requests C) email D) DHCP Server