IDEAS home Printed from https://ideas.repec.org/a/bla/jfnres/v18y1995i1p89-101.html
   My bibliography  Save this article

An Indirect Test For Dividend Relevance

Author

Listed:
  • Mazhar A. Siddiqi

Abstract

This paper provides an indirect test of dividend relevance conducted in periods that straddle the tax law changes effected by the Tax Reform Act of 1986. Using the abnormal ex‐dividend day return to proxy for the tax penalty of dividends, I find a negative relation between changes in this tax penalty and changes in dividends paid. This result is consistent with corporations' equating, at the margin, the costs of dividend payout to its benefits. Hence, this is indirect evidence of dividend relevance.

Suggested Citation

  • Mazhar A. Siddiqi, 1995. "An Indirect Test For Dividend Relevance," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 18(1), pages 89-101, March.
    • Handle: RePEc:bla:jfnres:v:18:y:1995:i:1:p:89-101
    DOI: 10.1111/j.1475-6803.1995.tb00213.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-6803.1995.tb00213.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-6803.1995.tb00213.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mazhar Siddiqi, 1997. "Using ex-day returns to separate the tax and information effects of dividend changes," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 21(2), pages 83-92, June.
    2. Bechman, Ken L. & Raaballe, Johannes, 2006. "Taxable Cash Dividends," Working Papers 2005-4, Copenhagen Business School, Department of Finance.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jfnres:v:18:y:1995:i:1:p:89-101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/sfaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.