Ex-dividend date stock behavior and the clientele effect: Evidence around a tax reduction

Ercio Muñoz Saavedra and Arturo Rodriguez

Global Finance Journal, 2017, vol. 32, issue C, 55-61

Abstract: This study analyzes the behavior of stock prices around the ex-dividend date focusing on the effects of a major tax reduction. Using the 40 most heavily traded shares on the Santiago Stock Exchange, the study evaluates price drop ratios using various measures of ex-dividend day prices. The findings indicate that the dividend tax reduction has an effect on the price drop ratio; this result is consistent with the clientele effect hypothesis.

Keywords: Dividends; Clientele effect; Taxes (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:32:y:2017:i:c:p:55-61

DOI: 10.1016/j.gfj.2016.06.003

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