Is a dividend tax penalty incorporated into the return on a firm's common stock?

• Autores: Dan Dhaliwal, Oliver Zhen Li, Robert Trezevant
• Localización: Journal of accounting and economics, ISSN 0165-4101, Vol. 35, Nº. 2, 2003, págs. 155-178
• Idioma: inglés
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• Resumen

  • We find that a firm's dividend yield has a positive impact on its common stock return that is decreasing in the level of institutional and corporate ownership, our indicator of whether the marginal investor in a firm's common stock is more likely to be a low-tax or a high-tax investor. These results suggest that (1) a dividend tax penalty is incorporated into the return on a firm's common stock and (2) both a firm's dividend policy and its ownership structure impact the size of the dividend tax penalty.