Inflation, Taxation and the Valuation of Shares

John Pointon

Accounting and Business Research, 1996, vol. 27, issue 1, 51-57

Abstract: A share valuation model is developed that takes account of the possibility of shareholding periods extending beyond one year, income taxes, capital gains taxes paid on realised gains and indexation for inflation. For an infinite dividend series, an optimal shareholding period is derived, which is shown to be related to the level of the after-tax risky rate, discounted at the growth rate, vis-à-vis the after-tax riskless rate, deflated for the general rate of inflation. In turn, this determines whether or not the value of the share is indifferent to the capital gains tax rate and the rate of inflation.

Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00014788.1996.9729531 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:acctbr:v:27:y:1996:i:1:p:51-57

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RABR20

DOI: 10.1080/00014788.1996.9729531

Access Statistics for this article

Accounting and Business Research is currently edited by Vivien Beattie

More articles in Accounting and Business Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().