This paper investigates for the identity of the ex-dividend date traders using the Finnish unique database that records the trades of all investors on the market. We find evidence of two investor groups trading around the ex-dividend date: domestic non-financial investors doing dividend...

The introduction of the 2006 Norwegian shareholder income tax was announced in advance, and it increased top marginal tax rates on individual dividend income from zero to 28 percent. We document strong timing effects on dividend payout on a large panel of non-listed corporations, with a surge of...

The modest title chosen by the editor understates the contribution of this paper. To the best of our knowledge, we were the first to use company-based shareholder valuation approach to refute the prevailing view that retention of corporate earnings under the U.S. tax system automatically...

We develop a valuation model that integrates corporate capital structure and dividend payout policies. The resulting extended Miller (1977) model explicitly incorporates the different tax rates on corporate income, personal interest, dividends, and capital gains. We apply the model to ten...

To study the long-run effect of dividend taxation on aggregate capital accumulation, we build a dynamic general equilibrium model in which there is a continuum of firms subject to idiosyncratic productivity shocks. We find that a dividend tax cut raises aggregate productivity by reducing the...

We estimate firms' implied cost of capital and examine the effects of dividend taxes on this ex ante measure. The results support the dividend tax capitalization hypothesis. We find a positive relation between implied cost of equity capital and dividend yield that is decreasing in aggregate...

We document new evidence that the ex-dividend day stock price behavior in the U.S. is inconsistent with the tax explanation in several aspects. We find that within a tick multiple, as dividend size increases, dividend yields increase, but the price-drop-to-dividend ratios decrease. For dividends...

We examine a type of distribution that is taxed as a capital gain rather than as a dividend. Since the distribution induces a realized capital gain while the price change on the ex-distribution day is an unrealized gain, ex-day return behavior provides evidence of the value of tax-timing capital...

This paper challenges accepted methods of calculating the effect of deferred realization on the effective rate of capital gains tax paid by common shareholders and their overall tax burden. Those methods are shown to implicitly assume the special case of gains accrued in lump sum, even under the...

This paper tests whether firms altered their dividend and share repurchase policies in response to the 2003 reductions in shareholder tax rates. We predict that firms substituted dividends for repurchases, because the reduction in dividend tax rates exceeded the reduction in the capital gains...