Does the investment interest limitation explain the existence of dividends?
AbstractMiller and Scholes show that under certain conditions the Federal Income tax taxes dividend income at a rate no higher than the rate on capital gains. Tabulations of actual 1977 tax returns show that the special circumstances under which this can occur apply to less than 3% of dividend income and no significant role can be ascribed to their result in the determination of corporate dividend policy.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Financial Economics.
Volume (Year): 9 (1981)
Issue (Month): 3 (September)
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Web page: http://www.elsevier.com/locate/inca/505576
Other versions of this item:
- Daniel R. Feenberg, 1982. "Does the Investment Interest Limitation Explain the Existence of Dividends?," NBER Working Papers 0530, National Bureau of Economic Research, Inc.
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- James M. Poterba & Lawrence H. Summers, 1985.
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- Poterba, J.M., 1989.
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- James M. Poterba & Lawrence H. Summers, 1985. "New Evidence that Taxes Affect the Valuation of Dividends," NBER Working Papers 1288, National Bureau of Economic Research, Inc.
- Robert L. McDonald & Naomi Soderstrom, 1986. "Dividend and Share Changes: Is There a Financing Hierarchy?," NBER Working Papers 2029, National Bureau of Economic Research, Inc.
- Joseph E. Stiglitz, 1988. "The General Theory of Tax Avoidance," NBER Working Papers 1868, National Bureau of Economic Research, Inc.
- Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2002. "Dividend Policy inside the Firm," NBER Working Papers 8698, National Bureau of Economic Research, Inc.
- James M. Poterba, 1988.
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1871, National Bureau of Economic Research, Inc.
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