Resumen de On the risk-neutral value of debt tax shields

M. Barbi

• The recent interest in the valuation of the benefits from debt financing arises from the disagreement in the financial literature about the meaning of �value of tax shields�. Although it is accepted that the tax deductibility of interest increases the value of the firm, the correct valuation of this extra-value is controversial. We adopt a risk-neutral approach to derive a general formula for the value of tax shields. This framework clearly shows that this value equals the summation of the discounted future tax savings. Once we specify a leverage policy and a cash flow dynamics, some well-known formulas are obtained.