| Author: | Menyah, K. |
| Title: | Ex-dividend equity pricing under UK tax regimes. |
| Journal: | Journal of Business Finance and Accounting
1993 : JAN, VOL. 20:1, p. 61-81 |
| Index terms: | STOCK MARKETS PRICING UNITED KINGDOM TAXATION |
| Language: | eng |
| Abstract: | This paper investigates the two major hypotheses on ex- dividend day pricing in the UK equity market. Using a variety of empirical tests it finds no support for the tax- induced dividend clientele hypothesis - a result consistent with the proposition that investors prefer capital gains to dividends. While the evidence on the short-term trading hypothesis is not conclusive for the market as a whole, it indicates that among frequently traded shares, the practice existed before the introduction of the anti-avoidance legislation of 1970. Its extent and intensity as borne out by the data has since reduced. |
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