Journal of Accounting and Economics Vol. 35 No. 2 2003

Dividend taxes and firm valuation:

Michelle Hanlon¹; James N. Myers²; Terry Shevlin³

¹ University of Michigan–Ann Arbor · ² University of Illinois Urbana-Champaign · ³ University of Washington

Abstract

Harris and Kemsley (J. Account. Res. (1999) 275) suggest that shareholder-level dividend taxes on retained earnings are fully impounded into stock prices at the top statutory rate. Harris and Kemsley base their empirical tests on Ohlson (Contemp. Account. Res. (1995) 661) with the addition of dividend taxes. We analyze Harris and Kemsley's extended Ohlson model and evidence. We show that the model, tests, and results in Harris and Kemsley are non-diagnostic regarding dividend tax capitalization.

DOI

10.1016/s0165-4101(03)00016-8

Volume

35

Issue

2

Pages

119-153

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓