ACCOUNTG 448 - Taxation and Global Management Decisions

Course Overview

Traditional finance and strategy courses often do not consider the role of taxes. Similarly, traditional tax courses often ignore the richness of the decision context in which tax factors operate. The objective of this course is to develop a framework for understanding how taxes affect business decisions.

Part of being financially savvy is having a basic understanding of how taxation affects business decisions that companies typically face: forming the business and raising capital, operating the business, compensating employees, financing new projects, expanding through acquisition, divesting lines of business, and expanding internationally.  Taxes have a direct impact on cash flow and often divert 30% to 40% of a firm’s pretax cash flow to the government.  Taxes are everywhere and are an essential part of the global business environment.

Throughout the course, we will link the tax strategies that we learn with concepts from corporate finance, financial accounting, business law, and economics.  We will make extensive use of real transactions to illustrate the impact of the tax structures on earnings and cash flows. Understanding how tax rules work and how they interact with other relevant factors places students at a distinct advantage in the marketplace.  This course is particularly useful to those interested in a career in general management (e.g., executive in a large company, entrepreneur, or owner of a family business) or financial intermediation (e.g., financial analyst, venture capitalist, consultant, or investment banker).

Although significant time will be dedicated to learning important tax “rules” this is NOT a rules-oriented class. Instead the course takes the perspective that taxes are one additional set of constraints which should be considered in global business decisions.  

Course Requirements

I will determine each student’s grade based on his or her class participation, performance on cases (to be completed in teams), a midterm exam (optional), and a final exam.

Representative Readings

The principal textbook is Scholes, Wolfson, Erickson, Maydew, and Shevlin. Taxes and Business Strategy: A Planning Approach, Prentice Hall, 4th edition.

Cases materials and other readings will supplement the textbook.