DOI: 10.36347/sjebm.2017.v04i10.009

Pages: 719-728

The main goal in corporate financing decisions is firm value maximization and therefore, there must be a link between firm value and corporate finance decisions. This study critically looks at literature on the relationship among taxes, corporate financing decisions, and firm value. The study arrives at different results. Different researchers utilized different methodologies and approaches to analyse the relationship among corporate financing decisions, taxes and firm value. Which could have contributed to the contradicting results? It is evident from this study that companies often face primarily, two corporate financing decisions. These decisions are what proportion of profit should be channeled back into the business instead of paying them out as dividends and how much deficit they should finance by borrowing instead of issuing out equity.