How do dividend taxes affect stock volatility? In this paper, I use a decrease in dividend taxes as a natural … contract, changes in stock volatility due to dividend taxes may increase agency costs and therefore decrease overall welfare …-neutral shareholders, dividend taxes may exacerbate agency costs. The increase in agency costs will decrease shareholder welfare, which can …

volatile tax payments and the likelihood of dividend payouts is weaker for firms that distribute dividends to alleviate agency …Dividends are a key mechanism for shareholders to discipline managers and mitigate agency conflicts. This study … examines whether the volatility of tax payments is associated with dividend payouts. Consistent with the predictions, results …