Investors’ Payout-form Preference and Taxes
AbstractWe find the form of U.S. corporate cash payout to shareholders often relevant to share price and in different directions at different times. Regularly cash-dividend paying firms have a significant share price premium compared to regularly stock-repurchasing firms in the early 1970s, but this premium exhibits a significant general negative trend and turns into a discount in the mid-to-late 2000s. Also, the premium (discount) is significantly related to the time-series changes in the differential tax burden on dividends and long-term capital gains. It is not related to the excess market return.
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Bibliographic InfoPaper provided by School of Business and Management, American University of Sharjah in its series Finance Working Papers with number 06-05/2013.
Length: 56 pages
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Form of corporate cash payout; Investors’ preference; Taxes; Investors’ rationality;
Find related papers by JEL classification:
- G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
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