Australian Tax Changes and Dividend Reinvestment Announcement Effects: A Pre- and Post-Imputation Study
|Author(s):||Keith Chan, D McColough and Michael Skully|
|Date of publication:||April 1992|
|Working paper number:||16|
This paper used an event study approach to examine the impact of dividend reinvestment plans on shareholders returns in the pre- and post-imputation environment. The daily share return behaviour indicated that the announcement to introduce DRP was received indifferntly by the market prior to the imputation, but was valued positively afterwards. The results support the suggestion that under imputation the optimal dividend policy is to distribute the maximum franked dividend and implement a DRP to retain cashflows.
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Published as: Chan, K. K.W., McColough, D. M. and Skully, M. T. 1993, "Australian Tax Changes and Dividend Reinvestment Announcement Effects: A Pre- and Post-Imputation Study", Australian Journal of Management, 18(1), 41-62.
Chan, K. K. W., McColough, D. W. and Skully, M. T. 1996, "Australian Dividend Reinvestment Plans: An Event Study on Discount Rates", Applied Financial Economics, 6(6), 551-561.
Faff, R., Hillier, D. and Wood, J. 2000, "Beta and Return: Impications of Australia's Dividend Imputation Tax System", Australian Journal of Management, 25(3), 245-260.
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Manigart, S. and De Waele, K., 1999, "Choice Dividends and Contemporaneous Earnings Announcements on a Small Stock Market: An Empirical Study", Cahiers Economiques de Bruxelles, 161, 27-56.
Murray, J. S., 2012, "Framing and Disposition Effects in Stockholders' Dividend Preferences", Working Paper.