AN INDIRECT TEST FOR DIVIDEND RELEVANCE

Mazhar A. Siddiqi

12 citations0/0 files storedThe Journal of Financial Research

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Financial Markets and Investment Strategies Corporate Taxation and Avoidance

Abstract

Abstract This paper provides an indirect test of dividend relevance conducted in periods that straddle the tax law changes effected by the Tax Reform Act of 1986. Using the abnormal ex‐dividend day return to proxy for the tax penalty of dividends, I find a negative relation between changes in this tax penalty and changes in dividends paid. This result is consistent with corporations' equating, at the margin, the costs of dividend payout to its benefits. Hence, this is indirect evidence of dividend relevance.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 12 citations exist upstream.

References

1979The effect of personal taxes and dividends on capital asset prices 1974The effects of dividend yield and dividend policy on common stock prices and returns 1970Marginal Stockholder Tax Rates and the Clientele Effect 1978Dividends and taxes 1982Dividends and Taxes: Some Empirical Evidence 1982The Ex-Dividend Day Behavior of Stock Prices: A Re-Examination of the Clientele Effect 1986Tax-induced trading around ex-dividend days 1991Ex‐Dividend Day Stock Price Behavior: The Case of the 1986 Tax Reform Act*

Cited by

2013Relationship between Dividend Payout and Economic Value Added: A Case of Square Pharmaceuticals Limited, Bangladesh

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.