Considering adjustments to the valuation formulae under unconventional tax systems, then numerous papers are devoted to valuation adjustments under a dividend imputation
Some countries, such as Australia, Canada, and the UK, have removed the double taxation and adopted a dividend imputation
system where the amount of tax charged at the firm's level will be credited back to the stockholders when they receive cash dividends.
It is similar to the "franking" mechanism that countries with dividend imputation
systems use to show that exempt dividends are paid out of income that was in fact subject to corporate-level tax.
[[tau].sub.C](*) measures corporate marginal tax benefits and is a function of statutory tax rates, nondebt tax shields, the probability of experiencing a loss, international tax rules about dividend imputation
and interest allocation, organizational form, and various other tax rules.
operates to ensure that distributed corporate income is taxed at the individual shareholder's rate, with the corporate tax serving effectively as a form of withholding tax on corporate income.
IMPCRED = imputation credit availability; this indicator variable equals 1 for observations from countries that have a dividend imputation
credit, 0 otherwise;
Since 1987, Australia has had a dividend imputation
tax system, which is a marked change from the classical system existing before that time and which exists in a number of countries such as the United States.
Imputation system: New Zealand's dividend imputation
system enables a resident company to allocate to shareholders a credit for New Zealand income tax.
the process of dividend imputation
, which largely eliminates any personal taxation on dividends (see Smith, 1993, for a comprehensive discussion of this process)
1993, `The ex-dividend day behaviour of Australian share prices before and after dividend imputation
', Australian Journal of Management, vol.
Further insight into the distribution of direct share ownership can be gained by examining the distribution of dividend imputation