In a context of tax reform in Brazil, the effects of the possible taxation of dividends and the possible end of interests on equity are discussed. Cases like the Brazilian one, in which a high tax differential is present, can provide greater capacity for tax planning and bias shareholders and executives to prefer a form of shareholder compensation to the detriment of others. The present study seeks to understand the factors associated with the amount of earnings paid in the form of dividends and interest on equity (JCP), and the influence of different forms of compensation on the market value of companies. The results found indicate a relation of substitution between dividends and JCP, a strong relationship between the size of the company and its distribution of JCP, and a possible preference for dividends over JCP influencing the market value of listed companies in Brazil.
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