In the economic spread analysis, a tax penalty is allocated to a bank’s interest spread on loans but no tax credit is allocated to the interest spread on deposits. Why does that not violate the Modigliani and Miller theorem?
Answer to relevant QuestionsWhat are the benefits of a long-term perspective on value creation? For companies? For the economy? Provide examples of businesses where network effects would or would not apply. Why does organic growth often create more value than growth from acquisitions? Describe how different types of organic growth might create different amounts of value. What actions (good and bad) might managers take when investors have already-high expectations and managers desire to outperform peers on TRS? Discuss the three generic sources of a company’s growth, their relative importance for its growth, and what this means for a company’s strategy.
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