Corporate Valuation - Lanxess AG

Table of Content

Executive Summary

Table of Content

List of Abbreviations

List of Figures

List of Formulas

List of Tables

List of Appendices

1 Introduction
1.1 Preface/Problem Description
1.2 Objectives
1.3 Scope and Structure of Work

2 Basic Valuation Principles
2.1 Preface
2.2 Corporate Valuation - History and Drivers
2.3 Discounted Cash Flow Methods
2.3.1 Entity Method
2.3.2 Equity Method
2.3.3 Conclusion of the DCF Method
2.4 Multiplier Method
2.4.1 Introduction to the Multiplier Method
2.4.2 Methodology of the Multiplier Method
2.4.3 Conclusion of the Multiplier Method
2.5 Summary

3 Company Analysis: Lanxess AG
3.1 Preface
3.2 History of Lanxess AG
3.3 Product History
3.4 Market History
3.5 Customer and Sales Analysis
3.6 Strategic Alliances/Partnerships
3.7 Assessment of Earnings
3.8 Summary

Corporate Valuation: Lanxess AG ii Table of Content

4 Information Baseline and Quality
4.1 Preface
4.2 Financial Projections for Lanxess AG
4.3 Assessment of Available Data and Data Quality
4.4 Cash Flow Calculation for Lanxess AG
4.5 WACC Calculation for Lanxess AG
4.6 Analysis and Derivation of Peer Group
4.7 Summary

5 Valuation
5.1 Preface
5.2 DCF Method
5.3 Multiplier Method
5.3.1 Arkema
5.3.2 BASF
5.3.3 Clariant
5.3.4 DSM
5.3.5 Huntsman
5.3.6 Rhodia
5.3.7 Actual Calculation of Multiplier Method
5.4 Results of Both Evaluation Methods/Summary

6 Conclusion
6.1 Theoretical/Practical Summary
6.2 Recommendation
6.3 Future Research Direction

Appendix

References

Executive Summary

The main scope of this assignment is the valuation of the Lanxess AG a German based chemistry corporation, with about 14,400 employees and annual sales of about 5.05 billion EUR. The core activities of Lanxess AG are specialty chemicals, polymers and intermediates, including rubber chemicals, material protection products, ion exchange resins, inorganic pigments, semi-crystalline products and fine chemicals.

The authors have described the two enterprise evaluation methods – the DCF-approach and the multiplier method – with its advantages and disadvantages in practical application. For the corporate evaluation of Lanxess AG, the authors based the calculation on those two most common global evaluation approaches. The DCF method estimates the value of a company by discounting expected cash flows in the future or determined period of time, similar to the value of an investment. For the assessment of the company value, the entity and equity DCF method with an assumed constant growth rate of 3 percent has been applied. For the validation of the calculated DCF corporate values the multiplier method was conducted as second evaluation method based on EBIT-, EBITDA-, Price-Cash Flow-, Price-Earnings, and revenue ratios. For the necessary peer-group, the authors selected six appropriate global competitors: Arkema, BASF, Clariant, DSM, Huntsman and Rhodia. The different evaluation methods lead to various enterprise values of Lanxess AG with a bandwidth of evaluated results between 1.50 billion EUR and the value of 17.98 billion EUR. The DCF-approach results in values from 3.81 billion EUR to 5.81 billion EUR. For the multiplier method there have been calculated enterprise values between 1.5 billion EUR and 17.98 billion EUR. The overall median enterprise value of 3.09 billion EUR compared to the market capitalization of Lanxess AG with 2.19 billion EUR nearly fits into the proposed evaluation strategy but appears undervalued.

Each of the described and applied methods has its own validity because of the specific underlying assumptions. Therefore it is not surprising that there a range and difference in the calculated enterprise value for Lanxess AG

The team of this evaluation project for Lanxess AG is satisfied with the results by the given information and data quality. The results confirm that the potential investor should analyse Lanxess AG in detail with proposed various functional due diligences.

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Figures

Figure 1 Systematic of the DCF-Methods

Figure 2 Assessment of DCF-Critics

Figure 3 Lanxess Logo

Figure 4 Business Segments of Lanxess - 2003 vs. 2004

Figure 5 Business Segments of Lanxess - 2009

Figure 6 Sales per Region

Figure 7 EBITDA (Estimation) 2010

Figure 8 Sales Forecast 2010

Figure 9 Extrapolation - From Past to Future Growth

List of Formulas

Formula 1 Entity Method - Calculating the Equity's Market Value

Formula 2 Calculating the Cost of Debt Capital

Formula 3 Calculating the Tax-Rate

Formula 4 Calculating the Cost of Equity Capital via CAPM

Formula 5 Calculating the Beta-Factor

Formula 6 Calculating the Weighted Average Cost of Capital (WACC)

Formula 7 Equity Method - Calculating the Equity's Market Value

Formula 8 WACC - General

Formula 9 CAPM - General

Formula 10 CAPM - Lanxess AG

List of Tables

Table 1 Drivers for Corporate Evaluation

Table 2 Company Life Cycle - Finance Stages

Table 3 Required Figures for the DCF-Method

Table 4 Calculation of the Free Cash Flow (FCF)

Table 5 Calculation of the Flow to Equity (FTE)

Table 6 Sales by Market

Table 7 Performance Indicators - Polymers

Table 8 Performance Indicators - Intermediates

Table 9 Performance Indicators - Chemicals

Table 10 Income Statement - Lanxess Group

Table 11 Due Diligence Aspects

Table 12 Cash Flow Calculation for Lanxess

Table 13 WACC-Calculation for Lanxess

Table 14 Criteria for Peer Group Determination

Table 15 Valuation of Lanxess via DCF

Table 16 Financial Details of Lanxess 2009

Table 17 Financial Details of Arkema 2009

Table 18 Financial Details of BASF 2009

Table 19 Financial Details of Clariant 2009

Table 20 Financial Details of DSM 2009

Table 21 Financial Details of Huntsman 2009

Table 22 Financial Details of Rhodia 2009

Table 23 Valuation of Lanxess via Multiplier

Table 24 Comparison of Lanxess' Evaluation Results

List of Appendices

Appendix 1 ITM-Checklist: 360-degree analysis

1 Introduction

1.1 Preface/Problem Description

In recent years, owner interests of stock corporations increased and influenced companies’ investment-, financing- and distribution policy. This situation triggered the discussion regarding the determinants of evaluating corporate values. Furthermore, this discussion gave new impulses for implementing strategies to improve the corporate value. Most literature recommends setting entrepreneurial strategies for maximizing the corporate value by Value-Based-Management and Performance Measurement. Efficient methods for evaluating a company are requested and need to be up-to-date.¹

Assessment occasions can be divided into 2 sections. On the one hand there are occasions which change the property relations of the company to be evaluated (e.g. buy or sale, IPO, capital increase) and occasions without any change of the property relations (e.g. increasing of debt capital, value-based salary of the staff).²

The value of a company consists of financial and nonfinancial aspects. Due to the fact that nonfinancial aspects are difficult to measure, the theory of evaluating a corporate value is limited to determine and evaluating financial performance indicators. The linked reduction of evaluation-complexity will finally lead to a reduced information value. Thus, it is the challenge to figure out whether the stress ratio between complexity reduction and evaluation accuracy can be suitably demonstrated.³

1.2 Objectives

The objective of this work is to evaluate the corporate value of Lanxess AG. The used approaches concentrate on the discounted cash flow method, the multiplier method and the liquidation approach, due to the fact that even in the 1950’s e. g. W. Busse von Kolbe outlined not to use the income approach in order to detect a corporate value but rather base on cash flows.⁴

1.3 Scope and Structure of Work

Chapter 2 starts with an overview of corporate valuation history and its drivers. In addition this chapter contains the different types of valuation methods. Within the Discounted Cash Flow Methods, the Entity Method and the Equity Method are explained in detail. It also includes the methodology of the Multiplier Method. A description of formulas and approaches helps to understand the different calculations. This chapter will be completed by description of the Liquidation Method.

In the course of this assignment, it will become clear why a detailed analysis for corporate valuation is essential for achieving meaningful results. For this reason, Chapter 3 introduces Lanxess as this company will be examined in the practical part. This includes the product and market history. Furthermore, a customer and sales analysis takes place. Finally, an assessment of Lanxess’ earnings is outlined.

Chapter 4 deals with information baseline in order to understand the complexity of corporate valuation. It describes Lanxess’ financial projections and the assessment of available data and data quality. Further, the different types of Due Diligence are represented to analyze the circumstances of a target company. This is followed by the WACC- and CAPM calculation. At last, a definition of the peer group is given.

Chapter 5 contains the practical part of this assignment. Based on the peer group, the theoretical approaches explained in Chapter 2 are used to calculate the corporate valuation. The calculation is conducted by means of formulas of the different valuation methods. An overview of all results completes this chapter.

The conclusion in Chapter 6 sums up all main points of this assignment. A theoretical and practical summary will be given. This is followed by recommendations for efficient corporate valuation in order to ensure meaningful statements. Finally, an outlook into the future will be given.

2 Basic Valuation Principles

2.1 Preface

The issue ‚corporate evaluation’ for decades is a significant point of interest in scientific research.⁵ Mostly, long-established firms that have an adequate history of products and services are dealt with in pertinent literature.⁶ ‘Corporate evaluation’ means to detect a value for a whole company or a specific department or subsidiary. It is to distinguish between the ‘value’ of a corporation and its ‘price’. ‘Value’ means the future pecuniary gain that the evaluated object has for the interested party. This financial objective can be extracted from the present value of future cash flows to the evaluated subject.⁷ Therefore ‘value’ indicates a potential ‘price’ whereas ‘price’ itself means the actually realised price, for instance within a transaction as for instance a buying or selling transaction.⁸ There are several traditional and historical approaches of corporate evaluation⁹ that will be pointed out in this chapter in order to establish a valuable base for the following evaluation of Lanxess AG.

2.2 Corporate Valuation - History and Drivers

The rise and fall, e. g. of the new economy in the 1990ies and early 21st century clearly pointed out the importance of precisely evaluating a corporate value. Several difficulties as for instance unpredictable environmental stresses have to be considered due to the company’s value.¹⁰ Therefore detecting a fair and realistic value of a corporation may be a huge challenge for today’s business world.¹¹

Generally, there are conventional and comparative approaches of corporate valuation. Conventional methods themselves can be distinguished as global evaluation methods and separate evaluation methods. The separate evaluation approach predominantly consists of the liquidation value method and the reproduction value method; whereas the global evaluation approach is subdivided into the discounted cash flow method and the earnings value method.¹² Comparative methods, such as the multiplier method, detect the enterprise value by comparing several indices or company key figures of different but comparable with the target company’s. Those weighted figures lead finally under consideration of the company-specific enterprise values - to the aspired corporate value of the observed corporation. Another approach is the so called future prospects approach which is out of scope of this assignment.¹³

There are several motives for a corporate valuation, even considering the company lifetime cycle.¹⁴ The party which is interested in the corporate value can be - depending on the particular valuation driver - shareholders, external investors (e. g. venture capitalists or business angels¹⁵ ), lenders or potential purchasers.¹⁶ Generally the drivers for corporate valuation can be classified into transaction-related and non-transaction- related drivers. Another delineation into dominated, where the valuation process is indicated voluntary, and non-dominated occasion, where the evaluation is external- driven, can be undertaken.¹⁷ This can be gathered from the following table:

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Table 1 Drivers for Corporate Evaluation¹⁸

Whereas at transaction-related valuation events the shareholder structure will change, this will not appear at not-transaction-related evaluation reasons.¹⁹

Drivers for corporate evaluation as well can be detected with the help of the company life cycle:

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Table 2 Company Life Cycle - Finance Stages²⁰

Based on the lifetime cycle of a company, there are several drivers for a corporate valuation: In order to generate equity from venture capitalists even in the seed-phase the shareholder might evaluate the enterprise. During the expansion-phase growth-options can be the drivers for corporate valuation or before an IPO (Initial Public Offering) takes place a corporate valuation can lead to a realistic enterprise value in order to fix the price of issue. A similar reason for evaluation is a secondary public offering (SPO), e. g. a capital increase during the maturity phase as well as the purchase or sale of departments or subsidiaries. During a company crisis it can be helpful to evaluate the company in order to receive restructuring loans or to rearrange the financial structure of the company.²¹

Detached from the company life cycle corporate valuation can be undertaken continuously, e. g. in order to conduct an impairment test or purchase price allocations as well as squeeze-outs, entry of a principal stockholder or similar.²²

As current practice shows, sale or purchase of a company or its departments resp. subsidiaries has a major relevance as drivers for corporate evaluation²³, followed by generating additional debt- and equity capital. Even restructuring a company is seen as an important driver for corporate valuation.²⁴

2.3 Discounted Cash Flow Methods

Being a global evaluation method and a major approach of corporate valuation the discounted cash flow approach (DCF) has its origin in the Anglo-Saxon area.²⁵ Due to the fact that the figure ‘cash flow’ is perceived as a very important figure due to manage an enterprise, a current study by PricewaterhouseCoopers proves that managers evaluate cash flows as highly relevant for their management.²⁶ The DCF-method bases on the present value method, well-known from dynamic investment appraisal.²⁷ The present value approach evaluates, whether an investment is favourably or not and reveals if the required rate of return can be achieved. In order to detect the present value the predicted future cash flows that are growing out of the investment, discounted by the cost of capital, are summarised and reduced by the investment conducted in the beginning of the calculation.²⁸ The discount rate represents the expected yield of the investors and therefore represents the enterprises’ cost of capital²⁹. Basically, the discounted cash flow can be defined as the “present value of all prospective cash flows of an enterprise, discounted by a risk-adjusted interest factor”³⁰. The coherence between discount-rate and enterprise value - with assumed stable cash flows - generally can be stated as follows: a high discount rate leads to a low enterprise value - and vice versa. Therefore the primary value drivers are the predicted cash flows on the one hand and the risk- adjusted discount rate on the other hand. As there are some different practices for the DCF-method, they all have one methodological principle. Essentially the DCF-approach can be subdivided into the equity- (resp. net) and the entity (resp. gross) approach.³¹

The following illustration provides the systematic of the discounted cash flow methods. The bold marked methods/approaches are scope of this assignment and later on part of the valuation process of Lanxess AG in the practical part of this assignment. The total cash flow approach, where the tax shield is directly regarded within the cash flow calculation³² as well as the adjusted present value approach, assuming an equity financed enterprise first and adjusting this value by regarding debt financing³³, are not part oft his assignment.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1 Systematic of the DCF-Methods³⁴

Both the entity- and the equity approach finally can lead to the same or a similar result, following the process of defining and forecasting the cash flows, detecting the discount- rate and determining the present value.³⁵ Therefore, the result is primarily affected by the extent of the predicted cash flows and the risk-adjusted discount-rate. Due to forecast future cash flows appropriately, conducting an elaborate company- and environmental analysis that respects both the past values and future development perspectives at the same time is essential.³⁶

In order to determine an adequate discount-rate the literature refers to the so called ‘WACC’ (Weighted Average Cost of Capital) and ‘CAPM’ (Capital Asset Pricing Model) approaches. Those approaches consider the cost of both equity- and debt capital with respect to the underlying timeframe of calculation.³⁷

A basic principle of the DCF-method is the focus on future values. This proceeding is similar to the earned value approach but with the difference of discounting future cash flows rather than future benefits. The detection of the future value can be undertaken in two phases: First, the past five to ten years are analysed; the according cash flows then conduce to the forecast as a benchmark. At the second step the so called ‘terminal value’ will be detected. Terminal value in this case means that this figure represents the prospective achievable corporate performance.³⁸

In order to use the DCF-method for the corporate valuation of Lanxess AG it is vital to know which figures and formulas being used in the different DCF-methods:

Abbildung in dieser Leseprobe nicht enthalten

Table 3 Required Figures for the DCF-Method³⁹

In the following, both the entity and the equity method will be outlined, followed by the affiliation of the particular required data.

2.3.1 Entity Method

As already outlined the focus of this assignment is on the WACC-approach from the entity perspective. This method of detecting the market value of the equity capital bases on the free cash flow and mentions both the cost of equity- and debt capital under consideration of their relation toward each other.⁴⁰ First, the total capital is to be evaluated by summing the discounted FCFs. Then, the debt capital will be subtracted to detect the market value of the equity capital.⁴¹ The following formula shows, how to proceed:

Abbildung in dieser Leseprobe nicht enthalten

Formula 1 Entity Method - Calculating the Equity's Market Value⁴²

The free cash flows of a determinable period are discounted by the weighted average cost of capital, followed by detecting the equity value subtracting the debt capital from the result.⁴³

2.3.1.1 Free Cash Flow Calculation

The major figure of the gross resp. entity approach is the so called ‚free cash flow’ (FCF). In order to detect this figure, the following overview is to be used.

Abbildung in dieser Leseprobe nicht enthalten

Table 4 Calculation of the Free Cash Flow (FCF)⁴⁴

The operative earnings coming from the budgeting first have to be reduced by corporate tax in order to determine the earnings after taxes. Due to the fact that the FCF must not be affected by interest and other financial figures, the earnings have to be adjusted by those. Interest payments and -earnings, depreciation and appreciation as well as (dis-) investments therefore have to be disregarded or rather subtracted resp. re-added. In this consequence, tax advantages have no effect on the FCF.⁴⁵

2.3.1.2 Cost of Debt Capital

Being one important element in order to calculate the cost of capital by dint of the WACC the costs of debt capital have to be determined. Debt capital can be for instance loans, commercial paper or several distinctive bonds.⁴⁶

Usually, the cost of debt capital tends to be substantially lower than the cost of equity and is calculated with the following formula:

Abbildung in dieser Leseprobe nicht enthalten

Formula 2 Calculating the Cost of Debt Capital⁴⁷

The corporate bond spread spread corporate bond can be derived from the rating and depends on the market environment which changes daily. The risk-free interest rate [Abbildung in dieser Leseprobe nicht enthalten]is to be derived by using the yield of a risk free bond, e. g. treasury bills. The tax rate[Abbildung in dieser Leseprobe nicht enthalten]is calculated as:

Abbildung in dieser Leseprobe nicht enthalten

Formula 3 Calculating the Tax-Rate⁴⁸

After having defined the cost of debt capital now the cost of equity capital has to be detected in order to apply the WACC. For this calculation the ‘capital asset pricing model’ (CAPM) will be suited.⁴⁹

2.3.1.3 Capital Asset Pricing Model

The capital asset pricing model is required as the second important part to calculate the average cost of capital applying the weighted average cost of capital calculation (WACC)⁵⁰. In an assumed ‘efficient market’ the expected return on equity (investment in shares) above the yield of a risk free bond (government bond) depends directly proportional from the ‘ [Abbildung in dieser Leseprobe nicht enthalten]’ of the share. Beta ([Abbildung in dieser Leseprobe nicht enthalten] ) is a variable which indicates how strong a security paper correlates with the value development of the total market portfolio. This correlation is also called the ‘systematic risk’, which means how risky the security paper is. A[Abbildung in dieser Leseprobe nicht enthalten] -Factor of 1 for instance represents a 100%-correlation of the share with the according underlying market (e. g. the ‘DAX’; Deutscher Aktien Index). Whereas the systematic risk of a stock cannot be eliminated, the company-specific risk (‘unsystematic risk’) can be avoided by diversification. Therefore, it is not ‘specially’ rewarded by the CAPM. The cost of equity is the sum of a basic risk-free rate [Abbildung in dieser Leseprobe nicht enthalten] the company specific risk rate.⁵¹

Abbildung in dieser Leseprobe nicht enthalten

Formula 4 Calculating the Cost of Equity Capital via CAPM⁵²

Applying the CAPM it is important to consider the underlying assumptions of the capital asset pricing model. Influence factors like inflation or that treasury bills does not guarantee a real are some examples.⁵³ In fact, the of the evaluated company is the correlation-degree of the value development of the evaluated share with the value development of the underlying market portfolio. Higher the company’s beta, higher is the volatility and therefore the risk for an investor. In consequence to this the investor’s goal is to keep beta as low as possible. Beta can be calculated using the following formula:

Abbildung in dieser Leseprobe nicht enthalten

Formula 5 Calculating the Beta-Factor⁵⁴

After having defined the cost of capital and the cost of debt, all relevant determinants to calculate the weighted average cost of capital approach (WACC) are defined and presented.

2.3.1.4 Weighted Average Cost of Capital

The WACC-approach is one of the most popular DCF-method and therefore in scope of this assignment, as previously outlined. The process in general is to subtract the market value of the debt capital from the market value of the total capital in order to detect the market value of the equity capital.⁵⁵ After identifying the sum of all FCFs the result is to be discounted by the cost of debt- and equity capital⁵⁶. These costs already have been explained and now are weighted due to their relation to each other. This works by using the WACC-formula:

Abbildung in dieser Leseprobe nicht enthalten

Formula 6 Calculating the Weighted Average Cost of Capital (WACC)⁵⁷

Inflation or growth of the company resp. their cash flows as well can be regarded by determining the discount rate via the WACC.⁵⁸

The WACC therefore can be used both to value the entire enterprise value as well as detecting the equity value.⁵⁹ In general, the WACC lies between 5 to 10%. Stringently speaking, this has always been a company’s objective to cater for the higher return than the calculated WACC. The demerit is that there is no uniform calculation and that the financial ratios could be prone to manipulation.⁶⁰

Finally, the entity-approach now has been outlined. After presenting the equity approach in the following, the DCF-methods will be analysed critically in order to ascertain where vulnerabilities are and what can be concluded due to this method of corporate evaluation.

2.3.2 Equity Method

The equity resp. net-approach detects the equity’s market value directly by considering the cash flows that immediately accrue to the shareholders (FTE, flow to equity) and the cost of equity capital⁶¹ that is to be evaluated via the CAPM, similarly to the entity approach. The debt part of capital therefore will be disregarded in this approach and not be considered in calculating the equity’s market value⁶²:

Abbildung in dieser Leseprobe nicht enthalten

Formula 7 Equity Method - Calculating the Equity's Market Value⁶³

In order to follow the equity method appropriately the figures FTE and CAPM have to be calculated, as already displayed in the beginning of section 2.3. The method of calculating the CAPM has been explained already, therefore now the steps of detecting the flow to equity are illustrated, which can be taken from the following table:

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Table 5 Calculation of the Flow to Equity (FTE)⁶⁴

Outgoing from the previously outlined process of calculating the FCF now the ‘tax shield’ (payments related to debt capital; i. e. interest payments that are fiscal deductible, etc.⁶⁵ ), that has been subtracted before detecting the operative earnings, has to be readded. This leads to the total cash flow (TCF). Compensating interests, redemptions and other debt figures then leads to the equity-related cash flow, the FTE.⁶⁶

2.3.3 Conclusion of the DCF Method

The previously outlined DCF-approaches of corporate evaluation now will be critically analysed.

First of all it is to mention that the predominant approach of discounting future cash flows is the preferred method due to its methodology but leads to the problem of predictability. Future forecasts never can be distinct, clear and unambiguous.⁶⁷

Another major critic is the effect of the terminal value on the enterprise value. This figure, amongst nearly every other data that is relevant for detecting the enterprise value, impedes the result in a huge manner and therefore should be kept in mind as adjustable and falsifiable.⁶⁸

Regarding the figures ‘CAPM’ and ‘WACC’ it is to say that those are ex-post oriented and therefore not clearly applicable due to future evidence. As well, the CAPM bases on several assumptions - WACC in further instance, too, basing on the CAPM - and therefore is not unambiguously capable to illustrate the future appropriately. For example does the CAPM base on the assumption that any involved party expects the same return on their investments, acts risk-adverse and only invests in efficient investments. Further, the capital market is assumed as an infinite and risk-free capital source for the investors. Those assumptions are very theoretical and not reality-driven and can therefore rather not be accepted as operative viable.⁶⁹ A further problem occurs detecting the equity’s market value via the WACC-approach, due to the fact that even this figure ‘equity value’ is necessary to deploy the WACC. This leads to a circular reference that can only be resolved by mathematical iteration (similar to approximation).⁷⁰

[...]

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¹ Cf. Drukarczyk, J., Schueler, A. (2009), p. 1.

² Cf. Matschke, M. J., Brösel, G. (2005), p. 62.

³ Cf. Dolezych, T. (2003), p. 1.

⁴ Cf. Busse von Kolbe, W. (1957), pp. 39.

⁵ Cf. Hayn, M. (2003), p. 1.

⁶ Cf. Hayn, M. (2003), p. 3.

⁷ Cf. Dreyer, D. (2004), pp. 24.

⁸ Cf. Moxter, A. (1983), p. 8.

⁹ Cf. Schierenbeck, H., Wöhle, C. B. (2008), pp. 338.

¹⁰ Cf. Drukarczyk, J., Schüler, A. (2009), p. 35.

¹¹ Cf. Achleitner, A., Nathusius, E. (2004), p. 1.

¹² Cf. Becker, P. (2009), p. 79.

¹³ Cf. Hayn, M. (2003), p. 382.

¹⁴ Cf. Drukarczyk, J., Schüler, A. (2009), p. 1.

¹⁵ Cf. Rudolf, M., Witt, P. (2002), p. 30; Schwall B. (2001), p. 21.

¹⁶ Cf. Rudolf, M., Witt, P. (2002), pp. 25.

¹⁷ Cf. Schwall, B. (2001), p. 17; Drukarczyk, J., Schüler, A. (2009), p. 95.

¹⁸ Cf. ibid.

¹⁹ Cf. Schwall, B. (2001), p. 17; Drukarczyk, J., Schüler, A. (2009), p. 95.

²⁰ Cf. Kressin, T. (2003), p. 89.

²¹ Cf. Kressin, T. (2003), pp. 83.

²² Cf. Drukarczyk, J., Schüler, A. (2009), p. 2.

²³ Cf. Sieben, G. (1993), pp. 4321.

²⁴ Cf. Hayn, M. (2003), p. 8.

²⁵ Cf. Schacht, U., Fackler, M. (2009), p. 187.

²⁶ Cf. PwC (2010): Cashflow Excellence, p. 11.

²⁷ Cf. Schacht, U., Fackler, M. (2009), p. 187.

²⁸ Cf. Eichholz, R. (2004), pp. 37.

²⁹ Cf. Spremann, K. (2007), p. 187.

³⁰ Perridon, L. et al. (2009), p. 17.

³¹ Cf. Schultze, W. (2003), p. 359.

³² Cf. Prokop, J. (2002), p. 122.

³³ Cf. Prokop, J. (2002), p. 123.

³⁴ Cf. Braun, I. (2005), p. 62; Schacht, U., Fackler, M. (2009), p. 189.

³⁵ Cf. Brandl, N. (2004), p. 492.

³⁶ Cf. Wollny, C. (2010), p. 88.

³⁷ Cf. Achleitner, A., Nathusius, E. (2004), p. 47.

³⁸ Cf. Zitzelsberger, S. (2000), p. 66.

³⁹ Cf. Brandl, N. (2004), p. 492; Rummer, M. (2006), p. 93; Schacht, U., Fackler, M. (2009), pp. 189.

⁴⁰ Cf. Schacht, U., Fackler, M. (2009), p. 189.

⁴¹ Cf. Rummer, M. (2006), p. 93.

⁴² Cf. Nowak, C. (2003), p. 31.

⁴³ Cf. Brandl, N. (2004), p. 492.

⁴⁴ Cf. Baetge, J., Niemeyer, K., Kümmel, J. (2009), p. 383; Brealey, R., Myers, S. C., Allen, F. (2008), p. 102; p. 535.

⁴⁵ Cf. Schacht, U., Fackler, M. (2009), p. 191.

⁴⁶ Cf. Brealey, R., Myers, S. C., Allen, F. (2008), p. 399; Voigt, C. et al. (2005), p. 38.

⁴⁷ Cf. Wiehle, U. et al. (2008), p. 227.

⁴⁸ Cf. ibid.

⁴⁹ Cf. Brealey, R., Myers, S. C., Allen, F. (2008), pp. 215.

⁵⁰ Cf. Brealey, R., Myers, S. C., Allen, F. (2008), pp. 483.

⁵¹ Cf. Achleitner, A., Nathusius, E. (2004), p. 47.

⁵² Cf. ibid.

⁵³ Cf. Brealey, R., Myers, S. C., Allen, F. (2008), pp. 221.

⁵⁴ Cf. Wiehle, U. et al. (2008), p. 223.

⁵⁵ Cf. Dinstuhl, V. (2003), pp. 8.

⁵⁶ Cf. Rummer, M. (2006), p. 93.

⁵⁷ Cf. Besley, S., Brigham, E. F. (2008), p. 460; Brigham, E. F., Ehrhardt, M. C. (2010), pp. 358; Stephan, J. (2006), pp. 63.

⁵⁸ Cf. Schacht, U., Fackler, M. (2009), pp. 197.

⁵⁹ Cf. Pratt, S., Reilly, R. F., Schweihs, R. P. (1998), p. 45.

⁶⁰ Cf. Wiehle, U. et al. (2008), p. 27.

⁶¹ Cf. Brandl, N. (2004), p. 492.

⁶² Cf. Jahrmann, F. U. (2003), p. 324.

⁶³ Cf. Braun, I. (2005), p. 64.

⁶⁴ Cf. Baetge, J., Niemeyer, K., Kümmel, J. (2009), p. 383; Hersberger, D. (2008), p. 36.

⁶⁵ Cf. http://www.bf.uzh.ch/financewiki/index.php/Tax_Shield.

⁶⁶ Cf. Hersberger, D. (2008), p. 36.

⁶⁷ Cf. Brealey, R., Myers, S. C., Allen, F. (2008), pp. 221; Lukas, A. (2004), p. 109; Schmeisser, W. et al. (2008), p 137.

⁶⁸ Cf. Wiehle, U. et al. (2008), p. 27.

⁶⁹ Cf. Wöhe, G. (2005), p. 758.

⁷⁰ Cf. Dombret, A. (2006), p. 26.