effects considered in signaling games. We show that paying out free cash flow, either as a dividend or via repurchasing shares … dividend as long as capital gains are not heavily discriminated by taxation in relation to dividends. The positive price effect … of dividends can be enhanced if the firm implements a dividend reinvestment plan (DRIP). …

I examine whether and to what extent tax uncertainty affects a firm's dividend payouts. Based on the argument that tax … uncertainty exhibit a lower probability of dividend payouts. The effect of tax uncertainty is stronger in the presence of … negative effect of tax uncertainty on dividend levels, which is moderated by the costs of dividend reductions. These results …