Fiscal Cliff Creating A Spike In Extra Dividends
Blog of HORAN Capital Advisors | Dec 10, 2012 02:17AM ET
An outcome of going over the fiscal cliff is the tax rate on dividends would increase to as high as 43.4% versus the current rate of 15%. In response to this higher dividend tax rate companies are initiating special dividends to be paid before year end. As the below chart shows, in the month of November, 228 companies have announced their intention of paying a special dividend as compared to the 97 companies last year. These numbers are based on common stocks (non-funds) listed on the ASE, NYSE, NGM, NNM and NSC. The pace of extra dividends does not seem to be slowing in December.
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