Personal Dividend and Capital Gains Taxes: Further Examination of the Signaling Bang for the Buck May 2004 Personal Dividend and Capital Gains Taxes: Further Examination of the Signaling Bang for the Buck Abstract
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چکیده
In this study, we examine the impact of dividend and capital gains taxes on dividendincrease announcement returns. Consistent with Bernheim and Wantz (1995), we find dividend announcement returns increase in the dividend tax rate. In contrast to existing signaling models, however, we also find robust evidence that dividend announcement returns increase in the capital gains tax rate. This anomalous new result sheds new light on the bang-for-the-buck findings in Bernheim and Wantz (1995) and it raises new questions regarding the role for personal taxes in dividend announcement returns.
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