Fall 2023 • Seminar
Tax Law, Finance, and Strategic Planning
Exam Type: No Exam
This course develops tools for understanding and evaluating the effect tax laws have on strategic planning in both business and personal contexts. The perspective taken is generally that of financial economics, with cash flows resulting from transactions being viewed as items which are subject to valuation using asset pricing techniques. This approach allows for a precise understanding of where the value in a transaction comes from and how careful tax planning can help maximize this value. Consideration is also given to policy responses to strategic planning.
No advanced coursework in finance is assumed, but a variety of concepts are introduced in the course, and students are expected to learn how to use them effectively in the context of arriving at optimal tax strategies. Techniques covered include present value analysis, the use of payoff diagrams, option pricing using simple models and the Black-Scholes formula, and, as time permits, application of tax strategies to data sets based on historical and simulated financial data.