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"The Specifically Selected Goods and Services Tax Act" which is also known as luxury tax act has been passed by Legislative Yuan in Taiwan on April 15, 2011.This Act is used to reduce the possible real estate bubble occurred.Some investors treat the imposition of luxury tax on real estate transactions as negative information to real estate companies, especially to real estate development companies.But the effect of luxury tax of real estate transactions on shareholder wealth still remains undecided.Hence, I examine whether Luxury Tax Act will really affect shareholder wealth of real estate companies?Positive abnormal returns at the announcement day and cumulative abnormal returns around the announcement day of luxury tax act passed by Legislative Yuan are found in this study.Real estate companies with larger firm size which do experience significantly positive cumulative abnormal returns.The empirical results suggest that real estate companies with higher EPS may take advantage of the announcement of luxury tax act passed by Legislative Yuan than those with lower EPS.