The Dividend Substitution Hypothesis: Australian Evidence.
In a perfect capital market firms are indifferent to either dividends or repurchases as payout mechanisms, suggesting that the two payout methods should be perfect substitutes. Empirical research at the single country level, as well as cross country studies, provide evidence that dividends and repur...
| Publicado en: | Abacus Vol. 51; no. 1; pp. 37 - 63 |
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| Autores principales: | , , |
| Formato: | Artículo |
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Wiley-Blackwell
Mar2015
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=101363415&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 101363415 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00013072 AUB jtl: Abacus issn: 00013072 maglogo: Y pubinfo: dt: Mar2015 vid: 51 iid: 1 pid: 480 pub: Wiley-Blackwell artinfo: ui: 101363415 10.1111/abac.12041 ppf: 37 ppct: 26 formats: fmt: – @attributes: type: T – @attributes: type: P size: 197KB tig: atl: The Dividend Substitution Hypothesis: Australian Evidence. aug: au: Brown, Christine Handley, John O'Day, James affil: Department of Banking and Finance, Monash Business School, Monash University, Victoria Department of Finance, University of Melbourne, Victoria su: Stock repurchasing Capital market Dividends Capital gains Tax credits Financial aid sug: subj: Stock repurchasing Capital market Dividends Capital gains Tax credits Financial aid keyword: Buyback Dividend imputation Equal access Franking Off‐market Off-market On‐market On-market Payout Repurchase ab: In a perfect capital market firms are indifferent to either dividends or repurchases as payout mechanisms, suggesting that the two payout methods should be perfect substitutes. Empirical research at the single country level, as well as cross country studies, provide evidence that dividends and repurchases act as substitutes (the dividend substitution hypothesis), and that the tax treatment of dividends versus capital gains affects this relation. Australia, which operates under a full dividend imputation system, has two types of repurchases: on- and off-market. On-market repurchases are taxed as capital gains while off-market repurchases comprise a large dividend component carrying valuable tax credits. Australia thus provides a natural setting to investigate how the tax treatment of proceeds affects the dividend substitution hypothesis. Dividend substitution is found to exist for on-market repurchases but not for off-market repurchases, thus providing further support for the idea that the tax treatment of proceeds affects the substitutability of repurchases and dividends. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y custom: Copyright of Abacus is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. item: Abacus holder: Wiley-Blackwell dt: @attributes: year: 2015 holdings: @attributes: islocal: N |
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