The Influence of Income Tax on the Intrinsic Value of Companies- Two Cases

• Main Authors: HSIEH, CHIN-YU, 謝金諭
• Other Authors: 黃德舜
• Format: Others
• Language: zh-TW
• Published: 2013
• Online Access: http://ndltd.ncl.edu.tw/handle/86330871573053472671

碩士 === 國立中正大學 === 企業管理研究所 === 101 === Taiwan government is down the income tax of profit-seeking enterprise from 25% to 17% on 2010. This research is focused on the difference of manager’s decision and the business valuation when the income tax of profit-seeking enterprise is changed. In order to understand how the income tax influence on the firm’s value and its difference between high-tech and traditional industry, we selected the CCTV industry and the rubber industry to be our valuation’s companies. We used DCF method to evaluate the two companies’ intrinsic value and to analysis of the value drivers. My research conclusions as follows: 1、The main value drivers of VIVOTEC: (1)debt-to-equity ratio (2) R&D ratio (3) Tax Rate (4) inventory turnover ratio (5) sale-growth rate. 2、The main value drivers of HSIN YUNG CHIEN:(1) capital expenditure (2) sale-growth rate. (3) inventory turnover ratio (4) R&D ratio (5) Tax Rate. 3、According to the assessment of discounted free cash flow method，the intrinsic value of VIVITECH Inc. is NTD 73.96 per share. 4、According to the assessment of discounted free cash flow method, the intrinsic value of HSIN YUNG CHIEN Inc. is NTD 88.20 per share. Taiwan government provided the tax preference of high-tech industry before 2010 but the traditional industry cannot have this advantage. Taiwan government revised the tax laws on 2010 and showed the high-tech industry had to be more influenced than the traditional industry.