Dividends and Taxes: Some Empirical Evidence

@article{Miller1982DividendsAT,
  title={Dividends and Taxes: Some Empirical Evidence},
  author={Merton H. Miller and Myron S. Scholes},
  journal={Journal of Political Economy},
  year={1982},
  volume={90},
  pages={1118 - 1141}
}
This paper reexamines some recent tests of whether holders of shares with higher dividend yields receive higher risk-adjusted rates of return to compensate for the heavier taxes on dividend payments than on long-term capital gains. Our particular concern is with tests using short-run measures of dividend yield--that is, measures that seek to deduce the differential tax burden on dividends over long-term capital gains from differences in rates of return on shares that do not pay a cash dividend… 

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