Tax Differential View Of Dividend Policy

外汇网2021-06-19 16:34:10 62

The belief that shareholders pfer equity appciation to pidends because capital gains are effectively taxed at lower rates than pidends. Corporations that adopt this viewpoint generally have lower targeted payout ratios, or a long-term pidend-to-earnings ratio, as pidend payments are set rather than variable.

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Taobiz explains Tax Differential View Of Dividend Policy

Because companies that assume a tax differential viewpoint are focused on share appciation, they often have more funds available for growth and expansion than companies focused merely on increasing their pidends. The extent of the opinion depends on the tax structure of the region in which the company operates.

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