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Investors’ Payout-form Preference and Taxes


  • Abdelaziz Chazi
  • Alexandra Theodossioub
  • Zaher Zantout


We 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.

Suggested Citation

  • Abdelaziz Chazi & Alexandra Theodossioub & Zaher Zantout, "undated". "Investors’ Payout-form Preference and Taxes," Finance Working Papers 06-05/2013, School of Business Administration, American University of Sharjah.
  • Handle: RePEc:sha:finwps:06-05/2013

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    Form of corporate cash payout; Investors’ preference; Taxes; Investors’ rationality;

    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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