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| Author: | Papaioannou, G. Savarese, C. |
| Title: | Corporate dividend policy response to the tax reform act of 1986 |
| Journal: | Financial Management
1994 : SPRING, VOL. 23:1, p. 56-63 |
| Index terms: | DIVIDEND POLICY RESPONSIBILITY TAX REFORM |
| Language: | eng |
| Abstract: | The tax implications of dividend policy on a firm's equity value continues to be a controversial issue in corporate finance. Although some studies indicate that taxes only weakly affect corporate managers dividend policy decisions, other evidence suggests that investors react to dividend payouts in line with their effective taxation on dividend income and capital gains. The findings suggest that firms with low to medium payout ratios, which attract ordinary investors with high effective marginal tax rates, increased their dividend payout ratios. |
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