This paper derives and draws on simple formulae for the upper and lower bounds to the value of a series of risky cash flows in order to provide some instructive insights in the impact of taxation on these bounds.

The formulae are based on no-arbitrage conditions in a setting that is a straightforward extension of the Cox, Ross, and Rubinstein option-pricing model to an incomplete market model and look exactly like the popular Gordon growth formula.

Although based on stylized facts concerning the tax scheme the results promise to be a reliable guide for further research in this field.