IMPACT OF TAX AGGRESSIVENESS ON FIRM VALUE

Open Access
Author:
Wolf, Joshua Michael
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Samuel Burton Bonsall IV, Thesis Supervisor
  • Brian Spangler Davis, Honors Advisor
Keywords:
  • Tax
  • Tax Aggressiveness
  • Firm Value
  • Shareholder Opinion
  • Effective Tax Rate
Abstract:
The term “tax aggressiveness” has many synonyms such as tax planning, tax avoidance and even tax evasion. All of these terms refer to a company’s attempt to lower its amount of income tax liability. Tax aggressiveness includes many actions from taking certain tax credits, all the way to using tax shelters or undergoing corporate inversion. These actions taken by public companies can have an impact on their shareholders’ views of the company and therefore affect firm value and stock price. This study aims to analyze the relationship between tax aggressiveness and overall firm value through statistical regression analysis. This study uses data from public companies registered with the Securities and Exchange Commission across all industries covering a time frame of 2003 – present. Although this study will focus mainly on statistical analysis, some conclusions will also be drawn regarding investor sentiments towards different specific methods of tax aggressiveness.