This research investigates the influence of personal taxes on the valuation of dividends in the UK. Hitherto most empirical studies on personal taxes and dividends have used US data with conflicting and inconclusive results. UK data has more potential for illuminating the issue because the UK has had several substantial reforms in tax policy. The empirical models tested by this study are derived from a well-defined theoretical version of the capital asset pricing model incorporating personal taxes. The research also attempts to overcome some of the difficulties encountered in constructing a well-specified econometric model: finding a correct measure of expected dividend yield for individual securities; biases due to heteroscedasticity; measurement error; and information effects. Methods of instrumental variables and generalized least squares are used to deal with some of the estimation problems. This study reports affirmative evidence that taxes significantly affect the equilibrium relationship between returns and dividend yields.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:629932 |
| Date | January 1992 |
| Creators | Chui, Alice Pui Ling |
| Publisher | University of Manchester |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
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