Capital gains tax rates and the cost of capital for small business: evidence from the IPO market

• 成果类型: Article
• 署名作者: Guenther, DA; Willenborg, M
• 署名单位: University of Connecticut; University of Colorado System; University of Colorado Boulder
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(99)00026-4
• 发表日期: 1999
• 页码: 385-408
• 关键词: SMALL BUSINESS; initial public offerings; capital gains tax

摘要

We examine the issue prices of small initial public offerings around the 1993 tax law change that reduced the capital gains tax on qualified small business stock. We compare the actual issue price of new stock with a benchmark price that is not affected by the change in capital gains tax. We find that, after controlling for IPO underpricing, the issue prices of qualifying small business stock after the tax rate change are significantly higher than the issue prices before the change. A control sample of nonqualifying firms shows no significant difference in issue prices. (C) 1999 Elsevier Science S.A. All rights reserved.