Tax implications of dividend policy

Barabás, Zoltán and Fazakas, Gergely (2010) Tax implications of dividend policy. Corvinus Journal of Sociology and Social Policy, 1 (2). pp. 51-79.

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This study examines the tax-arbitrage possibilities on the Budapest Stock Exchange between 1995 and 2007. The theoretical possibility for the arbitrage is the different taxation for different stockholders, for the private investors and for the institutions: the institutions had higher taxation on capital gain while private persons in the whole period had tax-benefits on capital gains. The dynamic clientele model shows, that there is a range of the price drops after dividend payouts which guarantees a risk-free profit for both parties. The research is based on the turnover data from 97 companies listed on the Budapest Stock Exchange. We have tested the significant turnovers around the dividend-dates. The study presents clear evidence that investors continuously did take advantages on the different taxation.

Item Type:Article
Uncontrolled Keywords:dividend policy, tax implications, tax-arbitrage, dynamic clientele
Divisions:Faculty of Business Administration > Institute of Finance and Accounting > Department of Finance
ID Code:299
Deposited By: Ádám Hoffmann
Deposited On:08 Mar 2011 12:17
Last Modified:19 Sep 2023 06:59

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