Empirical Studies On Dividend Income Tax Reform Affect The Listed Company's Share Price And Dividend Policy

Dividend Tax System is always been one of the most interesting and controversial topics in the western academic world. This article will study the economic influence and tax effect of the Dividend Tax Reform in 2005 to listed companies in terms of the two aspects of corporate capital cost and dividend distribution policy, on the basis of theoretical approach as well as empirical research.This article consists of 4 sections:The first chapter will introduce the common conception of dividend tax, the research background and research methodology to illuminate the importance and innovation of this article. The main content of this chapter ranges over many topics such as the details of 2005 Dividend Tax Reform, the react of stock market to this reform, the modes and reform trends of foreign companies, etc.In the second Chapter, we will discuss relative representative research results from the two aspects of corporate capital cost and dividend distribution policy such as "Old View", "New View", "Nucleus Theory of the Firm", "Customer Clientele Effect", "After-tax CAPM Model", etc.The third chapter, emphasizing on empirical research, is the key section of this article. Firstly, we used the dummy variable event study method to discuss the influence of the dividend tax reform to listed companies' stock prices. Then we partially verified the prediction of Tax-based Dividend Distribution Behavior Model to company management's adjustment behavior after the tax reform, through the studies of changes in listed companies' dividend distribution rate and structural transformation of dividend distribution.We forward several policy proposals in the fourth chapter based on the empirical research in the third chapter, which suggest that China should consider the abolishment of double dividend taxation in accord with the pace of income tax reform.