Excess taxation of capital gains is a by-product of inflation in a tax system that uses nominal values as its basis. Studies by Feldstein, Green and Sheshinsky [JPE 1978] and Feldstein and Slemrod [NBER WP 234, 1978] analyze related macroeconomic distortions associated with corporate stock...

In setting the allowable rate of return of public utilities, U.S. regulatory agencies and the courts continue to rely on the standard discounted-cash-flow (DCF) method based on the Gordon-Miller-Modigliani model of share valuation under constant growth - a model which ignores personal taxes....

The personal tax impact on share prices of a permanent distribution via stock repurchase was first modeled by Bierman and West (JF 1966, #4) who argued that the tax impact is minimized under permanent ownership by the same shareholders. Elton and Gruber (JF 1968, #1) faulted the original model...

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...

By limiting their attention to the effect of capital gains tax on the price asked by mid-cycle sellers, Elton and Gruber (Review of Economics and Statistics v.52, 1970) overlook a parallel effect of capital loss credit on the bid price offered by mid-cycle buyers. We show that unequal marginal...

This paper seeks to draw attention to a flaw in the firm’s Free Cash Flow model and related statement widely accepted in Corporate Finance. We argue that the common offset of any Current Liabilities against Current Assets distorts the FCF size, composition, and volatility, thereby misstating...

Lacking examples of IPO mechanisms that are open to the public and priced competitively, previous studies could not determine what size discount, if any, is efficient. We test and reject the hypothesis that underpricing is efficient or consistent with competition by comparing two consecutive...

Recent years have witnessed the proliferation of multiple-listed stocks traded in markets around the world. Any explanation for this phenomenon must address the question of efficiency with which pricing information flows among national markets. By the same token, the phenomenon of multiple...