Abstract

The introduction of dividends－received deduction at 2000 was expected to cause the increase of after－tax dividends income for corporation investors and make more dividends by the corporate with high ratio of corporation minority－shareholders. This paper examines that the ratio of corporation minority－shareholders would effect on dividends because of the introduction of dividends－received deduction. The results showed that the ratio of corporation minority－shareholders makes positive effect on denomination dividends rate, not pay－out ratio, and that the ratio of corporation heavy－ shareholders didn't effect on denomination dividends rate and pay－out ratio. The reason that the ratio of corporation minority－shareholders didn't effect on pay－out ratio is due to the tendency of dividend management policy based－on denomination dividends rate in Korea, and the result that the ratio of corporation heavy－shareholders didn't effect on dividends is due to the special status of heavy－shareholders.Through this study, it was not possible to find out that the corporation minority－shareholders change investment decision－making because of the introduction of dividends－received deduction, and this result is due to minor economic effects of dividends－received deduction, considering transaction costs induced by investment decision－making change. <Key words> dividends－received deduction, denomination dividend rate, pay－out ratio

Keywords

• Exclusion of Dividend Income from Gross Income
• Par Value Dividend Rate
• Dividend Payout Ratio

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