Abstract:

Inspiring from the existing literature regarding the impact of dividend tax rate change on dividend policy, this paper will be focused to analyze the manner that a change in dividend tax can influence the market capitalization for companies listed on Bucharest Stock Exchange, for the period 2008-2015, using regression models for a panel of data, including also some internal financial factors which can prevent the impact of change of dividend tax rate over the market capitalization. 
The main results of the paper pointed out a significant influence of dividend tax rate declines over the price per share which will be reflected and will have an influence over the market capitalization. Also we found a negative but not insignificant influence of net income, liquidity and market return over the market capitalization. 
Our results confirm that our conclusions are useful to be taken in consideration in practice by decisions markers of companies, when they faced with a decrease of dividend tax, to pay larger dividends and to maintain the actual shareholders, and as a result, increasing the market capitalization.