This study examines the unit (stock) price and volume behavior of master limited partnerships around the ex-dividend day. Since the dividends of master limited partnerships are not taxable to the unitholder, tax-based hypotheses predict no abnormal unit movements around the ex-day. Significant positive excess returns and volume are found before the ex-dividend day, and significant negative excess returns are found on the ex-dividend day. The findings, which are not significantly impacted by the Tax Reform Act of 1986, suggest ex-day stock movements are not solely a function of investor marginal tax rates or corporate trading behavior. Copyright 1991 by American Finance Association.
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Article provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 46 (1991) Issue (Month): 2 (June) Pages: 755-71 Download reference. The following formats are available: HTML,
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