Financial Market Imperfections and Corporate Decisions

2006 ◽  
Keyword(s):  
Financial Market ◽  
Market Imperfections ◽  
Corporate Decisions ◽  
Financial Market Imperfections

scholarly journals On the Timing and Pricing of Dividends: Reply

2016 ◽  
Vol 106 (10) ◽  
pp. 3224-3237 ◽  
Author(s):  
Jules H. van Binsbergen ◽  
Ralph S. J. Koijen
Keyword(s):  
Financial Market ◽  
Capital Gains ◽  
Market Imperfections ◽  
Tax Rates ◽  
Short Term ◽  
Economic Interpretation ◽  
Tax Returns ◽  
Financial Market Imperfections

Schulz (2016) replicates the findings of van Binsbergen, Brandt, and Koijen (2012)—henceforth, BBK—and agrees that the average pretax returns on short-term dividend strips are higher than those of the index, but argues that the after-tax returns are not. He thus provides a possible economic interpretation of the results in BBK: taxes. Schulz (2016) estimates the differential tax rates of dividends versus capital gains from ex-dividend day returns. We show that these estimated tax rates are suspect and imprecisely measured, peaking at over 100 percent in some periods. The results in BBK are robust to using tax rates from the literature (Sialm 2009). The arguments in Schulz (2016) thus crucially depend on implausibly large tax esti mates. We further discuss two other financial market imperfections discussed in the literature and show that they are also unlikely to explain the results in BBK. (JEL G11, G12, G35)

scholarly journals Financial market imperfections and productivity growth

1990 ◽  
Vol 13 (3) ◽  
pp. 321-345 ◽  
Author(s):  
Bruce C. Greenwald ◽  
Meir Kohn ◽  
Joseph E. Stiglitz
Keyword(s):  
Financial Market ◽  
Productivity Growth ◽  
Market Imperfections ◽  
Financial Market Imperfections
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