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Investors' Payout-form Preference and Taxes
Chazi, Abdelaziz Theodossioub, Alexandra Zantout, Zaher
Chazi, Abdelaziz
Theodossioub, Alexandra
Zantout, Zaher
Date
2013-06-05
Advisor
Type
Working Paper
Degree
Description
Abstract
We find the form of U.S. corporate cash payout to shareholders often relevant to share price and in different directions at different times. Regularly cash-dividend paying firms have a significant share price premium compared to regularly stock-repurchasing firms in the early 1970s, but this premium exhibits a significant general negative trend and turns into a discount in the mid-to-late 2000s. Also, the premium (discount) is significantly related to the time-series changes in the differential tax burden on dividends and long-term capital gains. It is not related to the excess market return.