How Did The 2003 Dividend Tax Cut Affect Stock Prices And Corporate Payout Policy
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How Did The 2003 Dividend Tax Cut Affect Stock Prices And Corporate Payout Policy
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Author :
language : en
Publisher:
Release Date : 2005
How Did The 2003 Dividend Tax Cut Affect Stock Prices And Corporate Payout Policy written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Dividends categories.
How Did The 2003 Dividend Tax Cut Affect Stock Prices
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Author : Gene Amromin
language : en
Publisher:
Release Date : 2005
How Did The 2003 Dividend Tax Cut Affect Stock Prices written by Gene Amromin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Dividends categories.
Executive Financial Incentives And Payout Policy
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Author : Jeffrey R. Brown
language : en
Publisher:
Release Date : 2010
Executive Financial Incentives And Payout Policy written by Jeffrey R. Brown and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with categories.
We test whether executive stock ownership affects firm payouts using the 2003 dividend tax cut to identify an exogenous change in the after-tax value of dividends. We find that executives with higher stock ownership were more likely to increase dividends after the tax cut in 2003, whereas no relation is found in previous periods when the dividend tax rate was higher. Relative to previous years, firms that initiated dividends in 2003 were more likely to reduce repurchases. The stock price reaction to the tax cut suggests that the substitution of dividends for repurchases may have been anticipated, consistent with agency conflicts.
Managerial Response To The May 2003 Dividend Tax Cut
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Author : Campbell R. Harvey
language : en
Publisher:
Release Date : 2007
Managerial Response To The May 2003 Dividend Tax Cut written by Campbell R. Harvey and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
We survey 328 financial executives to determine the effects of the May 2003 dividend tax cut on corporate payout policy. We find that the tax cut led to initiations and dividend increases at some firms, weakly more so at firms for which retail investors are particularly important. However, financial executives say that the tax rate reduction ranks behind stability of future cash flows and cash holdings (and for firms already paying dividends, taxes also rank behind the historic level of dividends) in a list of factors that affect dividend policy. Tax effects are of roughly the same importance as attracting institutional investors and the availability of profitable investments. We also search press releases and find that the dividend tax cut is only occasionally mentioned as the reason for an initiation, especially from 2004 onward. Overall, the evidence indicates that dividend tax rates are a second-order concern in setting payout policy.
Dividend Taxes And Corporate Behavior
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Author : Raj Chetty
language : en
Publisher:
Release Date : 2004
Dividend Taxes And Corporate Behavior written by Raj Chetty and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Dividends categories.
This paper analyzes the effects of dividend taxation on corporate behavior using the large tax cut on individual dividend income enacted in 2003. Using data spanning 1980 to 2004-Q2, we document a sharp and widespread surge in dividend payments following the tax cut, along several dimensions. First, an unprecedented number of firms initiated regular dividend payments after the reform. As a result, the number of publicly traded firms paying dividends, after having declined continuously for more than two decades, began to increase precisely in 2003. Second, many firms that were already paying dividends prior to the reform raised regular dividend payments significantly. Third, special dividends also rose. All of these effects are robust to introducing controls for profits and other firm characteristics. Additional evidence for specific groups of firms suggests that the tax cut induced increases in total payout rather than substitution between dividends and repurchases. The tax response was confined to firms with lower levels of forecasted growth, consistent with an improvement in capital allocation efficiency. The response to the tax cut was strongest in firms with strong principals whose tax incentives changed (presence of large taxable institutional owners or independent directors with large share holdings), and in firms where agents had stronger incentives to respond (large executive ownership and low levels of executive stock-options outstanding). These findings show that principal-agent issues play a central role in corporate responses to taxation.
Effects Of Bush Tax Cut And Obama Tax Increase On Corporate Payout Policy And Stock Returns
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Author : Andre C. Vianna
language : en
Publisher:
Release Date : 2018
Effects Of Bush Tax Cut And Obama Tax Increase On Corporate Payout Policy And Stock Returns written by Andre C. Vianna and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This article analyzes the effects of the American Taxpayer Relief Act of 2012 (Obama Tax Increase) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Bush Tax Cut) on corporate payout decision and stock returns. Logit and fixed-effect panel data analyses are conducted on all firms listed in NYSE, Amex and NASDAQ in the announcement windows of two, three and four quarters before and after the tax reforms. The results show that the implementation of these tax reforms more persistently affects dividend payments than stock repurchases. It also has a boosting effect on stock returns in the Bush Tax Cut that is 75 % greater than their reducing effect in the Obama Tax Increase, in absolute terms, controlling for dividend payment and stocks repurchase. These effects are robust to different market capitalization sizes. Less solvent firms persistently spend larger dollar amounts in stock repurchases, especially in the announcement of the Bush Tax Cut (1.11 % per solvency ratio percentage in the [-2Q, 2Q] window). Insolvency is more often significant and with positive impacts on stock returns in the Obama Tax Increase, suggesting that some investors decide to migrate to leveraged-high-growth firms once they realize that some dividend-paying firms could change their dividend policies.
The Encyclopedia Of Taxation Tax Policy
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Author : Joseph J. Cordes
language : en
Publisher: The Urban Insitute
Release Date : 2005
The Encyclopedia Of Taxation Tax Policy written by Joseph J. Cordes and has been published by The Urban Insitute this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Business & Economics categories.
"From adjusted gross income to zoning and property taxes, the second edition of The Encyclopedia of Taxation and Tax Policy offers the best and most complete guide to taxes and tax-related issues. More than 150 tax practitioners and administrators, policymakers, and academics have contributed. The result is a unique and authoritative reference that examines virtually all tax instruments used by governments (individual income, corporate income, sales and value-added, property, estate and gift, franchise, poll, and many variants of these taxes), as well as characteristics of a good tax system, budgetary issues, and many current federal, state, local, and international tax policy issues. The new edition has been completely revised, with 40 new topics and 200 articles reflecting six years of legislative changes. Each essay provides the generalist with a quick and reliable introduction to many topics but also gives tax specialists the benefit of other experts' best thinking, in a manner that makes the complex understandable. Reference lists point the reader to additional sources of information for each topic. The first edition of The Encyclopedia of Taxation and Tax Policy was selected as an Outstanding Academic Book of the Year (1999) by Choice magazine."--Publisher's website.
The Taxation Of Equity Dividends And Stock Prices
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Author : Richard W. Kopcke
language : en
Publisher:
Release Date : 2007
The Taxation Of Equity Dividends And Stock Prices written by Richard W. Kopcke and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) essentially halved the tax rate on dividends and reduced the top tax rate on capital gains. This paper explores the likely effect of JGTRRA on the composition of returns on corporations' common stock. Both larger corporations' past behavior and theory suggest that the recent tax cuts are not likely to increase dividend payouts significantly. Instead, in the short run, dividends will continue to rise in the customary way in response to the recovery in earnings. In the longer run, the tax cuts will principally reduce companies' cost of capital, fostering capital deepening, when the economy is at full employment. With constant returns to scale prevailing at full employment, capital deepening reduces corporations' average gross return on assets and equity. Because the tax cuts increase the value of each dollar of earnings for shareholders, they could raise price-earnings ratios by more than 10 percent and stock prices by more than 6 percent. By fostering capital deepening, the tax cuts also tend to increase the real compensation of labor at full employment.
Executive Financial Incentives And Payout Policy
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Author : Jeffrey R. Brown
language : en
Publisher:
Release Date : 2004
Executive Financial Incentives And Payout Policy written by Jeffrey R. Brown and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Dividends categories.
We test whether executive stock ownership affects firm payouts using the 2003 dividend tax cut to identify an exogenous change in the after-tax value of dividends. We find that executives with higher stock ownership were more likely to increase dividends after the tax cut in 2003, whereas no relation is found in previous periods when the dividend tax rate was higher. Relative to previous years, firms that initiated dividends in 2003 were more likely to reduce repurchases. The stock price reaction to the tax cut suggests that the substitution of dividends for repurchases may have been anticipated, consistent with agency conflicts.
Ma Gcig Gsa Spyod S An Rgyud
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Author :
language : en
Publisher:
Release Date : 1978
Ma Gcig Gsa Spyod S An Rgyud written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1978 with categories.