Journal of Accounting and Economics Vol. 23 No. 3 1997
Stock price effects of the allowance of LIFO for tax purposes
Abstract
I investigate stock price behavior associated with the allowance of LIFO for tax purposes. The analysis is structured as an event study of the Revenue Acts of 1938 and 1939. The results indicate a positive net market reaction to legislative events leading to LIFO's incorporation into the US tax code for the sample firms having the largest estimated LIFO tax benefits. I conclude the market revised its probabilities that firms most likely to benefit would avail themselves of the opportunity to use LIFO and defer taxes on inventory profits.
- DOI
- 10.1016/s0165-4101(97)00011-6
- Volume
- 23
- Issue
- 3
- Pages
- 283-308
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref