Tax Clienteles and Implicit Taxes: Interaction of Multiple Clienteles in Financial Markets

Fundamentals of shareholder tax capitalization

“…These papers includeHarris and Kemsley (1999),Harris et al (2000),Collins and Kemsley (2000),Kemsley and Williams (2001), andWilliams (2002).3 Our approach also differs from that ofLewellen and Lewellen (2004), who compare the cost of internal and external equity (with both dividends and stock repurchases) with the cost of debt. However, our results are consistent with their finding that internal equity is less costly than external equity.…”