search query: @author O'Brien, T. J. / total: 6
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| Author: | O'Brien, T. J. |
| Title: | The constant growth model and personal taxes |
| Journal: | Journal of Business Finance and Accounting
1991 : JAN, VOL. 18:1, p. 125-132 |
| Index terms: | CAPITAL GAINS TAX SHARES GROWTH MODELS DIVIDENDS ASSET VALUATION TAXATION |
| Language: | eng |
| Abstract: | Given finite horizons, it is examined how capital gains taxes affect the valuation of a share of stock in the traditional constant growth model. The role of personal taxes is explored at a deeper level than has heretofore been provided in the literature. It is shown that it is not in general accurate to assume that the after-tax required rate of return and the growth in dividends per share are independent of the tax rate. It is presented, that the direction of asset value as a function of the capital gains tax rate is indeterminate and it is possible to create a tax regime so that tax rate changes have no influence on asset values. |
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