Odd-lot costs, taxes and the ex-date price effects of stock dividends: evidence from the Toronto Stock Exchange

Article Abstract:

The impact of transaction costs on ex-date returns of stocks paying stock dividends is investigated. A market where no odd-lot order costs are incurred is analyzed. Eighty stock dividends paid by Toronto Stock Exchange-listed companies for the period 1977-1988 is examined. Results show that abnormal ex-date returns before May 24, 1985 do not significantly differ from zero, supporting the argument that US ex-date findings for stock dividends are caused by odd-lot order costs.

Securities and Commodity Exchanges, Security and commodity exchanges, Securities Exchanges, Analysis, Management, Exchanges, Securities industry, Toronto Stock Exchange

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Tax induced trading volume around ex-dividend days under different tax regimes: the Canadian experience 1970-1984

Article Abstract:

An investigation into trading volume in Canada during ex-dividend days for four different tax regimes occurring between the years 1970 and 1984 shows the existence of increased trading activity. Analysis results also indicate that the Canadian trading system reacts directly towards tax effects and inducements. Corporations dominated trading from 1970-1971 and 1977-1981 while tax-free investors had their turn during the periods 1972-1977 and 1982-1984.

Canada, Taxation, Economic aspects, Stocks

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Institutional investors, analyst following, and the January anomaly

Article Abstract:

Evidence shows that average stock returns are lower in January, particularly in small and low stock price firms. It is argued that this is due to gamesmanship, rather than tax loss selling.

Financial analysts, Institutional investments, Investment analysis, Securities analysis

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