Document Type
Working Paper
Publication Date
2004
Abstract
We examine the impact of the May 2003 dividend tax cut and managerial stock holdings on corporate dividend initiation decision. We find that managers who hold sizable stakes in their companies are more likely to initiate dividends following this tax cut. This positive relation is stronger for firms with higher growth opportunities. These results are consistent with the hypothesis that managers initiate dividends to maximize their own wealth. Moreover, the market reacts negatively (most positively) to dividend initiation announcements by firms with higher (lower) growth opportunities and higher (lower) managerial share holdings.
Recommended Citation
Nam, Jouahn; Wang, Jun; and Zhang, Ge, "The impact of the dividend tax cut and managerial stock holdings on corporate dividend policy" (2004). Department of Economics and Finance Working Papers, 1991-2006. Paper 29.
https://scholarworks.uno.edu/econ_wp/29