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Tax Differences (tax + difference)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

Credit Ratings and Taxes: The Effect of Book,Tax Differences on Ratings Changes

CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2010
BENJAMIN C. AYERS
G29; H25; H32; M41 This paper examines whether credit analysts utilize the information contained in the difference between book and taxable income in analyzing a firm's credit risk. Increased book,tax differences may be informative for credit rating agencies as they may signal decreased earnings quality or changes in the firm's off,balance sheet financing. Results suggest a significant negative association between positive changes in book,tax differences and ratings changes. This evidence is consistent with large positive changes in book,tax differences signaling decreased earnings quality and/or increased off,balance sheet financing. We also find that large negative changes in book,tax differences result in less favorable rating changes, consistent with these changes signaling decreased earnings quality. In additional analyses, we find that the association between changes in book,tax differences and rating changes is attenuated for high,tax-planning firms (e.g., where book,tax differences more likely reflect tax planning than decreased earnings quality). [source]

Credit Ratings and Taxes: The Effect of Book,Tax Differences on Ratings Changes,

CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2010
BENJAMIN C. AYERS
First page of article [source]

A Theory of Dividends Based on Tax Clienteles

THE JOURNAL OF FINANCE, Issue 6 2000
Franklin Allen
This paper explains why some firms prefer to pay dividends rather than repurchase shares. When institutional investors are relatively less taxed than individual investors, dividends induce "ownership clientele" effects. Firms paying dividends attract relatively more institutions, which have a relative advantage in detecting high firm quality and in ensuring firms are well managed. The theory is consistent with some documented regularities, specifically both the presence and stickiness of dividends, and offers novel empirical implications, e.g., a prediction that it is the tax difference between institutions and retail investors that determines dividend payments, not the absolute tax payments. [source]

Credit Ratings and Taxes: The Effect of Book,Tax Differences on Ratings Changes

CONTEMPORARY ACCOUNTING RESEARCH, Issue 2 2010
BENJAMIN C. AYERS
G29; H25; H32; M41 This paper examines whether credit analysts utilize the information contained in the difference between book and taxable income in analyzing a firm's credit risk. Increased book,tax differences may be informative for credit rating agencies as they may signal decreased earnings quality or changes in the firm's off,balance sheet financing. Results suggest a significant negative association between positive changes in book,tax differences and ratings changes. This evidence is consistent with large positive changes in book,tax differences signaling decreased earnings quality and/or increased off,balance sheet financing. We also find that large negative changes in book,tax differences result in less favorable rating changes, consistent with these changes signaling decreased earnings quality. In additional analyses, we find that the association between changes in book,tax differences and rating changes is attenuated for high,tax-planning firms (e.g., where book,tax differences more likely reflect tax planning than decreased earnings quality). [source]