|
Based on your IP address, your paper is being delivered by:
|
 |
 |
 |
 |
 |
New York, USA
Processing request.
|
Illinois, USA
Processing request.
|
Brussels, Belgium
Processing request.
|
Seoul, Korea
Processing request.
|
California, USA
Processing request.
|
If you have any problems downloading this paper,
please click on another Download Location above, or
File name: SSRN-id1571273. ; Size: 335K
|
|
Capital Gains Tax Overhang and Share Repurchases
Jonathan B. Cohn
University of Texas at Austin
Stephanie A. Sikes
University of Pennsylvania - Accounting Department
January 1, 2010
AFA 2011 Denver Meetings Paper
Abstract:
Anecdotal and empirical evidence suggest that price is an important determinant in firms’ share repurchase decisions. We investigate a factor that could affect a firm’s stock price around a repurchase and thus the number of shares a firm repurchases. Using unique data on the tax-sensitivity of a sample of institutional investors, we find that the tax overhang that results from taxable investors “locking in” their capital gains and demanding compensation for taxes owed upon realization is negatively related to a firm’s decision to repurchase shares and the number of shares repurchased.
Number of Pages in PDF File: 52
Keywords: share repurchases, capital gains lock-in
JEL Classification: G35, H24
working papers series
Download This Paper
Date posted: March 19, 2009
; Last revised: November 25, 2011
Suggested CitationCohn, Jonathan B. and Sikes, Stephanie A., Capital Gains Tax Overhang and Share Repurchases (January 1, 2010). AFA 2011 Denver Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1363791 or http://dx.doi.org/10.2139/ssrn.1363791
|
| Feedback to SSRN (Beta) |
|
|
People who downloaded this paper also downloaded:
1.
Determinants of Dividend Smoothing: Empirical Evidence
By
Mark Leary
and
Roni Michaely
2.
Are US CEOs Paid More? New International Evidence
By
Nuno Fernandes,
Miguel Ferreira, ...
3.
Behind the Scenes: The Corporate Governance Preferences of Institutional Investors
By
Joseph Mccahery,
Laura Starks, ...
4.
Capital Allocation and Delegation of Decision-Making Authority within Firms
By
John Graham,
Campbell Harvey, ...
5.
Penny Wise, Dollar Foolish: Buy-Sell Imbalances On and Around Round Numbers
By
Utpal Bhattacharya,
Craig Holden, ...
6.
Agency Problems in Public Firms: Evidence from Corporate Jets in Leveraged Buyouts
By
Jesse Edgerton
7.
Alliances and Corporate Governance
By
Andriy Bodnaruk,
Massimo Massa, ...
8.
Born Leaders: The Relative-Age Effect and Managerial Success
By
Qianqian Du,
Huasheng Gao, ...
9.
Collateral and Capital Structure
By
Adriano Rampini
and
S. Viswanathan
10.
Corporate Diversification and the Cost of Capital
By
Rebecca Hann,
Maria Ogneva, ...
|
|
|
|
