Does the Tax Cuts and Jobs Act of 2017 Impact Publicly Traded Firm Value?
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Authors
Overweg, Robin
Issue Date
2020-05-04
Volume
Issue
Type
Dissertation
Language
en_US
Keywords
Alternative Title
Abstract
Federal income tax legislative reforms have broad impacts, affecting nearly every person and business entity in the United States. Given the magnitude of these effects, research is necessary to determine whether tax reforms affect firm value. Research has been valuable in assessing the impacts of prior tax reform legislation. The present research examines whether announcements regarding the passage of a recent change to tax law, the Tax Cuts and Jobs Act of 2017 (TCJA), affected publicly traded firm value. This research compares the stock return effects of dividend-paying and non-dividend paying corporations, high-dividend and low-dividend paying corporations, and multinational and U.S.-only corporations. Multiple-date event study methodology is utilized to detect whether abnormal returns were present after announcements of the TCJA’s passage. The researcher ran event studies using S&P 500 companies for various dates significant to the TCJA’s passage through Congress. The results of the event studies provide substantial support to answer that question with a clear affirmative. The researcher finds support for the alternative hypothesis: that the TCJA of 2017 had a positive impact on firm value.
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Citation
Publisher
Creighton University
License
Copyright is retained by the Author. A non-exclusive distribution right is granted to Creighton University and to ProQuest following the publishing model selected above.