外文翻譯--現(xiàn)金股利的市場價值-關(guān)于citizens utilities案例的反思（英文）

1、Journal of Financial Economics 15 (1986) 395-405. North-Holland THE MARKET VALUATION OF CASH DIVIDENDS* The Citizens Utilities Case Reconsidered James M. POTERBA MITand NBER, Cambridge, MA 02139, USA Received Augus

2、t 1983, final version received May 1985 This paper re-examines the case of Citizens Utilities, a firm with one class of common stock which pays stock dividends and one which pays taxable cash dividends. John Long’s

3、(1978) study of the two shares’ relative prices suggests that investors may prefer cash dividends to equal-sized stock dividends, This paper finds that the cash dividend share’s ex-day price decline is less tha

4、n their dividend payment. Stock dividend shares fall by nearly their full dividend. The disparity between ex-day dividend valuation and the observed prices of the two shares is inconsistent with some explan

5、ations of the demand for cash dividends. 1. Introduction Financial economists continually debate the influence of taxes on investors’ valuation of dividend income. Long’s (1978) analysis of the Citizens Utilit

6、ies Company, a firm which has two classes of common stock, contributes an important empirical finding to this controversy. One class of Citizens Utilities stock pays taxable cash dividends; the other pays sto

7、ck dividends. These stock dividends are unusual because they are paid on a regular basis and taxed as capital gains.’ Long’s study focuses on the relative prices of the two shares, which provide an almost ideal

8、experiment for measuring the market valuation of taxable cash dividends. He concludes that ‘ . . . the price behavior of the two Citizens Utilities (CU) stocks implies that claims to cash dividends have, if a

9、nything, commanded a slight *I am indebted to Fischer Black, Terence German. Richard Rosenthal of Citizens Utilities Company, and especially to Rick Ruback, Lawrence Summers, Allan Kleidon (a referee) and

10、an anonymous referee for helpful suggestions. Ignacio Mas helped in gathering data. The National Science Foundation urovided financial suunort. The research renorted here is part of the NBER’s research p

11、rograms in Taxation and Fit&&l Markets. Any opinions expressed are those of the author and not of the NBER or NSF. ‘The Internal Revenue Service generally treats regular stock dividends, or dividen

12、ds which investors can choose to receive as either cash or stock, as taxable distributions. The unique character of the Citizens Utilities case derives from a set of IRS rulings in 1956. See Long (1978) or Ha

13、rvard Business School case #9-205-059 (1959) for further details. 0304-405X/X6/$3.5001986, Elsevier Science Publishers B.V. (North-Holland) J. M. Pore&, Marker valuation of cash dirGden& 397 ture that

14、 investors value cash dividend income more than capital gains. However, both sets of evidence are strongly inconsistent with the view, advanced by Elton and Gruber (1970) and many others, that investors

15、 value dividend income less than capital gains because of higher dividend tax burdens. These findings are consistent with Miller and Scholes’ (1978) claim that marginal traders face equal tax burdens on d

16、ividends and capital gains.4 The relative price of Class A and Class B shares is determined by the demand for taxable cash as opposed to untaxed stock dividends with CU’s risk characteristics. Citizens Utili

17、ties’ investors can choose the tax status of their dividend income. Long (1978, p. 242) explains how this should affect the equilibrium prices of Class A and Class B shares: ‘( P,/Pa) depends on both the relati

18、ve supplies of A and B shares and the cross-sectional characteristics of the investor population.. If very few investors face strictly higher tax rates on stock dividends than on cash dividends, then equilibrium

19、 values of PA/P, should be greater than or equal to the [dividend ratio]. PA/P, may equal [the ratio of dividend payments] if demand for series B shares by tax-exempt investors, and from other investors who

20、 can costlessly avoid differential taxation of cash dividends and capital gains, is sufficient to exhaust the supply of series B shares.’ Of course, taxes may not be the only consideration in investors’ valuatio

21、n of dividends. Even if the marginal investor in Class B shares faces a higher tax rate on dividends than on capital gains, PA/PB may still equal the dividend ratio.5 For example, cash dividends may reduce inves

22、tors’ transactions costs in rebalancing their portfolios or in financing consumption expenditures. These factors, by inducing a demand for the receipt of cash dividends, should affect both the relative prices

23、 of Class A and Class B shares and their respective price movements on ex-dividend days. The hypothesis that marginal investors face equal tax rates on dividends and capital gains cannot be distinguished from th

24、e view that dividends, while taxed more heavily than capital gains, are also valued for non-tax reasons. 4Miller and Scholes (1978) identify two ways for marginal traders to face equal tax rates on dividen

25、ds and capital gains. One, which focuses on the value of dividend income in relaxing the interest deduction constraint, has been called into doubt by Feenberg (1981). The second involves trading around ex-day

26、s by brokers and dealers, who face equal tax rates on dividends and short-term capital gains. There is some dispute [see Kalay (1982. 1984) and Elton. Gruber and Rentzler (1984)] about the importance of

27、transactions costs in restricting this type of trading. Calculations for the Citizens Utilities case reported in Poterba (1983) suggest that the bid-ask spread is usually large enough to render this trading

28、 unprofitable. 5Evidence on the shareholding population presented in Long (197X) and Poterba (1983) indicates that a substantial fraction of cash dividend stock is held by investors who appear to face hig