Abstract
We document shifts in the ex-dividend day pricing of Australian shares that paid cash dividends between 1973 and 1991, and relate these shifts to three major changes in the taxation of capital gains, dividends and superannuation funds. Despite the changes, which on the whole increasingly favoured dividends over capital gains, shareholders have continued to prefer capital gains. One change was the introduction of dividend imputation in 1987. While the market took some time to adjust to dividend imputation, by 1990 shareholders typically obtained 80% of the benefit of the imputed tax credit.

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