Abstract:-Individuals investing in a Venture Capital Trust IPO listed on the London Stock Exchange receive a number of conditional tax incentives; the time related nature of the associated conditions can create a 'lock-in effect'. By deriving and testing a model of the value of these incentives we examine how they influence investors' pricing and trading decisions. This paper contributes to the ongoing tax capitalisation debate in three ways: first, by calculating the magnitude of the lock-in effect without reference t… Show more
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