We examine the effects of the 2003 dividend tax cut on U.S. stock prices and corporate payout policies. First, using an event-study methodology, we compare the performance of U.S. stocks to that of other securities that should not have benefited from the tax change. We find that U.S. large-cap...

This study explores two effects of employee stock options on tax incentives to issue debt. The deduction of option from taxable income creates a non-debt tax shield, reducing the incentive to issue debt. In contrast, the grant of options also creates a demand for hedging unexpected stock price...

We examine the effects of the 2003 dividend tax cut on U.S. stock prices and corporate payout policies. First, using an event-study methodology, we compare the performance of U.S. stocks to that of other securities that should not have benefited from the tax change. We find that U.S. large-cap...