If shareholders have different marg

If shareholders have different marginal tax rates which are unknown to the corporation, then (contrary to the suggestion of Ruback (1986), taken up later by Brealey and Myers (1991, chapter 19)) the corporation will not be able to use a present value of the future riskless after-tax cash inflow calculated with an after-corporate-tax (borrowing) discount rate to guide its accept/reject decision, independently of its borrowing/dividend decision, and at the same time ensure that it does not accept projects with riskless future cash flows that some of its shareholders would prefer not be accepted. The only way the corporation can ensure the required result is to calculate the present value of future riskless after-tax cash flows using the before-tax riskless interest rate.