Ex-Dividend Date Behaviour Without Taxes

Ex-dividend date stock prices have usually been found to be smaller than the amount of dividends, and this has generally been attributed to the differential taxation of dividends and capital gains. This study examines the price drop to dividend relationship on the Istanbul Stock Exchange, which is basically tax-free. The findings provide weak evidence of less than one-for-one price drops. As the market is tax-free this implies that there are also non-tax factors affecting the price drop to