Brown and Clarke (1993)generally find evidence that investors in the Australian market assign a negative value to the imputation tax credit on ex-dividend dates.

Question

Quizplus · Accepted Answer

A study by Brown and Clarke (1993)has investigated the ex-dividend behaviour of share prices in Australia since the introduction of imputation.Brown and Clarke report mixed evidence on the issue of whether share price reactions include a valuation of the imputation tax credit.However,they generally conclude that market prices do react in a manner consistent with assigning a positive value to the imputation tax credit,but there is doubt as to whether the full value of imputation tax credits is fully capitalised into prices.

Brown and Clarke (1993)generally Find Evidence That Investors in the Australian