An Empirical Study On The Impact Of Corporate Income Tax And Dividend In Tax Financing Structure

Since Modigliani and Miller famous MM theory, one of the corporate income tax andpersonal income tax on the financing structure to become the main contents of the CorporateFinance. The link with the object of the corporate income tax and taxes on dividends paid, theshareholder wealth generated. Enterprise value due to the existence of the debt tax shieldeffect ", the corporate income tax impact of capital structure, thereby affecting the wealth ofthe shareholders; taxes on dividends paid in the form of a shareholders ’personal income taxenterprise distribution of dividends to shareholders, the formation of the direct deduction ofshareholders’ wealth. The corporate income tax and personal taxes on dividends willeventually affect shareholder wealth, thus affecting the financial behavior. Well, the financingbehavior of enterprises in China’s corporate income tax and taxes on dividends will producewhat kind of impact do?2005dividend tax reform as well as the corporate income taxreform in2007, the opportunity to provide for the study of the financing structure. In thisarticle, dividend tax and corporate income tax reform as an opportunity to study corporateincome tax and dividend tax on corporate finance structure.Firstly, the use of the Miller model is analyzed theoretically, be to test the hypothesisthat:"The reduction of the corporate income tax will reduce the company’s debt financing";"The reduction of dividend tax will increase the debt financing"."The reduction of thecorporate income tax and taxes on dividends, together will reduce the impact on the structureof corporate debt financing, both debt financing offset".Secondly, on the basis of theoretical analysis, we selected219companies of Shanghaiand Shenzhen A-share as samples, using multiple regression method of testing hypotheses.The results show that "the corporate income tax rate and the asset-liability ratio showed apositive correlation"."dividend tax rate and the asset-liability ratio showed a positivecorrelation";"Corporate income tax and dividend tax rate reduction, together will reduce theasset-liability ratio."Finally, a summary of this paper, puts forward the deficiency of the paper and theprospect for future research.