search query: @indexterm DIVIDEND POLICY / total: 136
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| Author: | De Angelo, H. |
| Title: | Payout policy and tax deferral |
| Journal: | Journal of Finance
1991 : MAR, VOL. 46:1, p. 357-368 |
| Index terms: | DIVIDEND POLICY TAXATION |
| Language: | eng |
| Abstract: | Equilibrium in the standard finance models implies that value-maximizing firms make taxable equity payouts, even when deferral effectively allows complete tax escape. Since tax deferral and consumption deferral are inherently joint supply of future consumption would result if firms followed conventional wisdom and adopted low or zero payout policies to capture tax deferral benefits. The market provides incentives for firms to supply both taxable payouts and capital gains by overriding any tax deferral advantage, just as it provides incentives for equity financing by overriding the corporate tax advantage of debt in "Debt and Taxes". |
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