Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
960105 | Journal of Financial Economics | 2011 | 19 Pages |
Abstract
In an integrated corporate tax system, resident shareholders receive a tax credit for corporate tax paid that can be used to offset personal tax on dividend income. Nonresident and tax-exempt (pension plan) investors cannot use the tax credit on corporate dividends and thus prefer to invest in flow-through entities. We estimate the value of the flow-through entity to nonresident and pension plan investors by examining the price change around the date of an unexpected announcement of a change in tax law related to Canadian publicly traded income trusts units creating an entity-level tax that makes them no longer tax-favored to these investors.
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Business, Management and Accounting
Accounting
Authors
Alexander Edwards, Terry Shevlin,