This paper develops a theory of capital structure in an international setting with corporate and personal taxes. The authors generalize the analysis of M. M. Miller (1987) to an international equilibrium characterized by differential international taxation and inflation in otherwise perfect international capital markets. The authors' analysis highlights the key role that corporate tax arbitrage plays in generating an international capital structure equilibrium, and they set forth a number of mechanisms for tax arbitrage transactions. They close the paper by outlining some implications of their analysis for national differences in capital structure, the international Fisher effect, and international tax effects on yield differentials.

This paper develops an approach for valuing flexible production systems using contingent claims pricing. Demand curves for the authors' model's underlying assets (output products) may be downward sloping, in contrast with the standard option pricing assumption. Also, their marginal production (exercise) costs may be increasing. In addition, they allow for multiple products and a productions capacity constraint. These elements of the model result in complex exercise decisions for the contingent claims that comprise the production system's value. The authors illustrate their approach by valuing a flexible system that produces two products that have profit margin functions with stochastic parameters.

ABSTRACT This paper develops an approach for valuing flexible production systems using contingent claims pricing. Demand curves for our model's underlying assets (output products) may be downward sloping, in contrast with the standard option pricing assumption. Also, our marginal production(exercise) costs may be increasing. In addition, we allow for multiple products and a production capacity constraint. These elements of the model result in complex exercise decisions for the contingent claims which comprise the production system's value. We illustrate our approach by valuing a flexible system that produces two products which have profit margin functions with stochastic parameters.

This paper develops an approach for valuing flexible production systems using contingent claims pricing. Demand curves for our model's underlying assets (output products) may be downward sloping, in contrast with the standard option pricing assumption. Also, our marginal production(exercise) costs may be increasing. In addition, we allow for multiple products and a production capacity constraint. These elements of the model result in complex exercise decisions for the contingent claims which comprise the production system's value. We illustrate our approach by valuing a flexible system that produces two products which have profit margin functions with stochastic parameters.

This paper develops a theory of capital structure in an international setting with corporate and personal taxes. We generalize the Miller analysis to an international equilibrium characterized by differential international taxation and inflation in otherwise perfect international capital markets. Our analysis highlights the key role that corporate tax arbitrage plays in generating an international capital structure equilibrium, and we set forth a number of mechanisms for tax arbitrage transactions. We close the paper by outlining some implications of our analysis for national differences in capital structure, the International Fisher Effect, and international tax effects on yield differentials.

ABSTRACT This paper develops a theory of capital structure in an international setting with corporate and personal taxes. We generalize the Miller analysis to an international equilibrium characterized by differential international taxation and inflation in otherwise perfect international capital markets. Our analysis highlights the key role that corporate tax arbitrage plays in generating an international capital structure equilibrium, and we set forth a number of mechanisms for tax arbitrage transactions. We close the paper by outlining some implications of our analysis for national differences in capital structure, the International Fisher Effect, and international tax effects on yield differentials.