论文信息 - THE LOCK-IN EFFECT OF CAPITAL GAINS TAXES: EVIDENCE FROM THE RJR NABISCO LEVERAGED BUYOUT

THE LOCK-IN EFFECT OF CAPITAL GAINS TAXES: EVIDENCE FROM THE RJR NABISCO LEVERAGED BUYOUT

Inability to observe investors' complete opportunity set has restricted prior analyses of capital gains taxes. This study overcomes these data limitations by examining involuntary capital gain realizations arising from the 1989 RJR Nabisco leveraged buyout. Confidential shareholder records permit precise estimates of the shareholders' tax bases. We find a negative correlation between price and tax basis for the shares sold. The direct evidence of investor tax-rationality is consistent with the lock-in effect and supports assertions that the lock-in effect exerts upward pressure on the supply curve in equity acquisitions.

Wayne R. Landsman | W. Landsman | Douglas A. Shackelford

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