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Taxes and the valuation of dividends: a study of dividend announcements in Germany

Christian Haesner; Deborah Schanz

This paper investigates the impact of the 2001 tax reform in Germany on dividend announcement returns. With this major tax reform, the full imputation system was replaced by the half-income system, which had a significant impact on the relative taxation of dividends and capital gains for most invest... Full description

Year of Publication: 2011
Authors: Haesner, Christian; Schanz, Deborah
Publisher: [S.l.] : Arbeitskreis Quantitative Steuerlehre (arqus)
Physical Description: Online-Ressource (PDF-Datei: 27 S., 621,79 KB)
Series: Arqus-Diskussionsbeiträge zur quantitativen Steuerlehre ; 117
Language: English
Subjects: Dividende | Dividend | Ankündigungseffekt | Announcement effect | Börsenkurs | Share price | Körperschaftsteuer | Corporate income tax | Kapitalertragsteuer | Capital income tax | Steuerreform | Tax reform | Steuerwirkung | Tax effects | Deutschland | Germany
Classification: jel-G35; jel-G14; jel-H3; jel-G34
Type of Publication (narrower categories): Arbeitspapier
Working Paper
Graue Literatur
Non-commercial literature
Type of Publication: Book / Working Paper
Notes: Systemvoraussetzungen: Acrobat Reader
Title record from database: ECONIS - Online Catalogue of the ZBW
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Summary: This paper investigates the impact of the 2001 tax reform in Germany on dividend announcement returns. With this major tax reform, the full imputation system was replaced by the half-income system, which had a significant impact on the relative taxation of dividends and capital gains for most investor classes. In an event study framework, we separate the tax effect of dividends from their positive signaling and agency cost effects to offer a more comprehensive picture of the valuation implications of dividends in Germany. Controlling for signaling and agency cost effects of dividends we find that the market response to positive dividend surprises is more pronounced under the full imputation system, where dividends are generally more favorable to investors from a tax perspective, than under the half-income system. Our results suggest that the observed decline in the dividend response coefficient is synchronized with the 2001 tax reform and hence attributable to the 2001 tax reform. -- Dividend Announcements ; Taxation
Item Description: Systemvoraussetzungen: Acrobat Reader
Physical Description: Online-Ressource (PDF-Datei: 27 S., 621,79 KB)
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