LBOs And Taxes: No One To Blame But Ourselves? Leland, Hayne E. California Management Review; Fall 1989; 32, 1; ABI/INFORM Global pg. 19

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Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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LBOs And Taxes: No One To Blame But Ourselves?

large premiums to current owners if markets don't underprice, but relatively ... An analysis of the RJR-Nabisco LBO shows that tax advantages from leverage alone can ... RJR-Nabisco data indicated a net tax rate in 1988 of 40%. ... that managers may lose their jobs. .... Let us start with the current environment where Te = T¡.

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