RT Journal Article
SR Electronic
T1 Tax Rates and Stock Returns
JF The Journal of Investing
FD Institutional Investor Journals
SP 35
OP 46
DO 10.3905/joi.2005.605305
VO 14
IS 4
A1 Indrani D. Basak
A1 Michelle R. Clayman
YR 2005
UL https://pm-research.com/content/14/4/35.abstract
AB This article presents results showing that anomalous corporate tax rates may lead to weaker stock returns. Low effective tax rates are associated with markedly weaker future returns. This phenomenon cannot be explained totally by factors such as beta, book to market, size, momentum, or the downturn in technology stocks. This implies that even though the stock market is generally assumed to be “semi-strongly” efficient, financial analysts can pick up important clues on companies' business operations and future stock returns from out-of-the-ordinary tax rates.