Download or read book The dividend puzzle written by Reinhard Windisch and published by GRIN Verlag. This book was released on 2008-03-20 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 2,0, University of Graz, language: English, abstract: For many years economists and financial experts have argued about the „dividend puzzle“, i.e. about the impact of dividends on stock prices. Describe this puzzle, explain why it appears so intractable, and state what might be done to bring us all closer to an acceptable solution.
Download or read book The Dividend Puzzle and Tax written by Chris Jones and published by . This book was released on 1991 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Tax Policy and the Dividend Puzzle written by B. Douglas Bernheim and published by . This book was released on 2008 with total page 61 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers a new explanation of the dividend puzzle, based upon a model in which firms attempt to signal profitability by distrubuting cash to shareholders. I assume that dividends and repurchases are identical, except that dividends are taxed more heavily. Nevertheless, I demonstrate that, under certain plausible conditions, corporations will pay dividends. Indeed, some firms will actually pay dividends, and then retrieve a portion of these payments by issuing new equity (perhaps through a dividend reinvestment plan), despite the fact that this appears to create gratuitous tax liabilities. In addition to providing an explanation for the dividend puzzle, I also derive a number of strong results concerning corporate payout decisions and government tax policy. Some of these results are surprising. For example, the relationship between repurchases and firm quality is hump-shaped. Moreover, despite the fact that a higher dividend tax rate depresses dividend payments, it does not affect either government revenue or welfare.
Download or read book A Fisherian Approach to the Dividend Puzzle written by Naoya Mori and published by . This book was released on 2017 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents an alternative theory explaining why firms adopt dividend policies of various kinds at intermediate levels. We extend the dividend clientele model from a traditional corner-solution framework to an interior-solution framework. For some investors, intertemporal double taxation and transaction costs produce a V-shaped function that is inflected at the point where the dividend payment just satisfies the investor's current liquidity needs. Because, generally speaking, clientele effects and risk diversification are not completely compatible, a firm's dividend pattern is expected to be consistent with the median shareholder's intertemporal consumption allocation when consumption preferences dominate tax preferences for majority shareholders.
Download or read book The Dividend Puzzle written by Larry Bauer and published by . This book was released on 2009 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We differentiate among some of the contending hypotheses about ex-dividend day pricing by studying share price behavior in Canadian markets around the ex-dividend day during the period 1977-2000. Over this time, the tax regime switched from favoring capital gains to favoring dividends, and in 1996 exchanges decimalized and reduced minimum tick sizes. We rule out both tax and tick-size effects on ex-day behavior. In other words, no support is found for tax-induced pricing and therefore consequently dividend clienteles or for the Bali and Hite (1998) pricing model. While, we do not explore the impact of any other micro-structure effects, we find some evidence that short-term trading may be a factor in the market.
Download or read book Payout Policy Irrelevance and the Dividend Puzzle written by Harry DeAngelo and published by . This book was released on 2007 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why do firms make large cash payouts, given the tax advantages of retention? The dividend puzzle is based on the premise that low or near-zero payouts are optimal (although not uniquely so) in frictionless markets, hence should be strictly optimal when payouts are taxed. This logic reflects misunderstandings about the nature of payout policy irrelevance in frictionless markets and the implications of adding personal taxes to the standard finance model. In frictionless markets, all optimal policies require substantial payouts. Those with low or near-zero distributions are strictly sub-optimal, and are infeasible given rational expectations. Payout policy irrelevance does not carry over to general equilibrium, so it is inappropriate to conclude that many or most firms can make low payouts for extended periods. Imposition of personal taxes perturbs the frictionless equilibrium on the margin, but does not alter the implication that all optimal policies require substantial payouts. In short, the standard finance model (with or without taxes) implies, requires, and predicts the large payouts observed in the world.
Download or read book The Economic Effects of Dividend Taxation written by Kenneth James McKenzie and published by . This book was released on 1996 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dividend Puzzle Revisited Effects of Taxation Domestic and Foreign Profits written by and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Dividend Puzzle written by Jack Broyles and published by . This book was released on 1996 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Lock in Effect and the Corporate Payout Puzzle written by Chris Mitchell and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Taxes on capital gains are deferred until realization, whereas dividend taxes are levied upon accrual. This often makes dividends tax-disadvantaged relative to share repurchases, which leads to the payout puzzle: why do firms pay dividends? This paper develops a model of corporate payout policy to demonstrate that tax deferment can also provide a partial solution to the payout puzzle: if shareholders demand repurchase premiums when selling equity back to a firm - as compensation for accelerated realizations - then dividend payments can become tax-efficient. This mechanism is appealing because it jointly explains a number of payout regularities without appealing to asymmetric information, incomplete contracting, repurchase constraints, and/or shareholder irrationality.
Download or read book The Dividend Puzzle Unpuzzled written by Srdjan D. Stojanovic and published by . This book was released on 2007 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: A claim of solving the dividend puzzle, as formulated by F. Black, is made. Various stock pricing formulas are established, extending substantially the classical Miller-Modigliani theory of valuation of shares in a way to contradict their main conclusion that dividends are irrelevant. Indeed, the main stock pricing formula obtained implies that if the company's costs depend on the available cash, then dividends affect the stock pricing function in a substantial manner. On the other hand, if the company's costs are independent of the available cash, if the dividend tax rate is constant, and under a further technical condition, the established formula is consistent with the Miller-Modigliani's conclusion of dividend irrelevancy. The presented theory is in the context of Miller-Modigliani's stream of dividends approach to valuation of shares, facilitated by the latest developments in the Black-Scholes type pricing theory for incomplete multivariable markets. Various cash flows are modeled, some using Ito SDEs, so that the value of the company is not assumed to be tradable, yielding market incompleteness. In spite of market incompleteness, under some simplifying assumptions, referred to as the Basic Equity Model, the established stock pricing formulas yield unique prices, i.e., prices independent of the investor's risk aversion. Some more general models when this property of prices does not hold are considered as well. The intrinsic non-uniqueness of fair stock prices in such cases is settled by choosing the value of the investor's HARA risk aversion parameter, while if the CARA wealth utility function is used, fair prices remain unique.
Download or read book Warrants Tax Dividends and Signaling Theory written by Dongsik Kim and published by . This book was released on 1994 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Dividend Concept in International Tax Law Dividend Payments Between Corporate Entities written by Marjaana Helminen and published by Springer. This book was released on 1999-12-09 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The distribution of profits between corporations resident in different jurisdictions gives rise to significant tax planning opportunities for multinational enterprises. As cross-border transactions between corporations grow in number and complexity, the question of how a profit distribution is classified for corporate income tax purposes becomes increasingly important, particularly in the context of issues such as double taxation, non-taxation and tax neutrality. This unique and practical work covers the rules determining which transactions may be classified and therefore taxed as dividend income and how classification conflicts may be resolved. The author examines the classification of various inter-corporate transactions, including: payments made under dividend-stripping arrangements fictitious profit distributions economic benefits in the context of transfer pricing returns on debt-equity hybrids interest payments in thin capitalisation situations and distributions following liquidation The analysis of each transaction refers to international tax law, including tax treaties, European tax law and the domestic tax law of Finland, Germany, Sweden and the United States. The comprehensive coverage and practical nature of The Dividend Concept in International Tax Law make it an essential acquisition for tax practitioners, researchers and tax libraries worldwide.
Download or read book Tax Handbook on Corporate Distributions and Dividends written by D. Larry Crumbley and published by Prentice Hall. This book was released on 1981 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Dividend Policy written by Ronald C. Lease and published by Harvard Business Review Press. This book was released on 2000 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt: With relevant anecdotes, surveys, examples, and research from the financial press, company documents, and academic literature, the book focuses less on mathematics and more on the intuition of share valuation as a function of dividend policy.
Download or read book The Relationship Between R D Investment and Dividend Payment Tax Incentives and Their Role in the Dividend Tax Puzzle written by and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Although much research on corporate dividend policy exists, the evidence is far from conclusive. Understanding how dividend taxes affect firm-level decisions is crucial to evaluating dividend imputation credits which provide shareholder-level tax credits for dividends received or decreased shareholder-level dividend tax rates, which reduce the double taxation of dividends. Using changes in New Zealand and Australia's tax regimes, this dissertation provides new evidence on the relationship between tax incentives for R & D investment and dividend payment. The results show that the theory that the tension between R & D investment and dividend payment decreases when a country previously not offering tax incentives for R & D investment or dividend payout, implements one, does not hold using New Zealand firms. Further, New Zealand dividend-paying firms with higher marginal tax rates behave in the manner predicted for firms moving from a tax regime offering a tax incentive for R & D investment to a tax regime offering tax incentives for both R & D investment and dividend payment. The results using Australian data, demonstrate that that the tension between R & D investment and dividend payment increases when a country previously offering only a tax incentives for R & D investment, offers one for both R & D investment and dividend payment. This result is driven by firms with high marginal tax rates. These findings demonstrate that the relationship between tax incentives for R & D investment and dividend payment varies according to firm marginal tax rates and typical dividend payment policies. It also reiterates the importance of considering firms' abilities to use R & D tax incentives, via their marginal tax rates, when contemplating the effects a shareholder-level dividend tax decrease will have on R & D investment. This dissertation also provides new insight into the corporate dividend policy views. The results support the double taxation and tax irrelevance views in dividend-paying firms operating in a tax regime with dividend imputation and capital gains taxes. By documenting a significant decrease in R & D investment after a change in dividend taxes, this dissertation also highlights a void in the current corporate dividend policy views and shows the need for the inclusion of R & D investment.
Download or read book Payout Policy written by and published by . This book was released on 2007 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.
