Shareholders'' Investment Tax Credit

• Main Authors: Chen,Ming-Hsien, 陳銘賢
• Other Authors: Yeh,Shu
• Format: Others
• Language: zh-TW
• Published: 1996
• Online Access: http://ndltd.ncl.edu.tw/handle/97214451989519673312

碩士 === 國立臺灣大學 === 會計學研究所 === 84 === The purpose of this study is to investigate whether the tax preferential treatment "Shareholders'' investment tax credit" can help companies raise capital in their seasoned stock issues. This study also analyses the alternative of shareholders'' investment tax credit or 5 years tax holiday. The empirical tests are based on the hypothesis that if investors take the shareholders'' investment tax credit into consideration when they price the seasoned stock issues, the price of the ex- rights shares will drop because of the disappearance of the tax benefits after the issue. This study examines 17 listed firms which are specified as "Major Technology Firms" or "Major Investment Projects" under ROC''s Statute for Industrial Upgrading The results are compared to those of other 259 companies which the preferential tax treatments do not apply. The empirical results show that the price of ex-rights shares do drop after the issue, but the effects are not significant. Also, the drop is not significantly related to the hypothetical tax benefit. Overall, these evidences are weak to support the notion. We can not conclude that investors take the tax benefits into consideration upon pricing seasoned stocks issues. This study also suggests that, as to individual investors, if a investment project has a net present value under 1.08 times the investment amount, shareholders''investment tax credit is superior to the 5 years tax holiday; however, as to entity investors, if a investment project''s net present value is above 5.08 times the investment amount, 5 years tax holiday will be better.