A substantial portion of my work at the PhD level has involved researching asset pricing, corporate finance, public policy, taxation, and investments issues. My PhD thesis focuses on the “Effect of capital gains taxes on asset pricing and equity issuance”. My dissertation consists of three papers (chapters) where the first paper is a theoretical paper on seasoned equity offerings (SEOs) explaining the pre-SEO and post-SEO price in the presence of capital gains tax “lock-in”. The second paper is an empirical paper investigating the effect of “lock-in” on significant negative issuance day returns associated with SEOs. The third and final paper is a theoretical as well as empirical paper exploring the “lock-in” effect for initial public offerings (IPOs) of U.S. equity in the presence of differential tax rates for short-term and long-term holdings. The results of these papers should be useful for corporate finance managers in making financing decision, investment bankers in pricing securities and analyzing market response after an offer, and policy makers and accountants in drafting and arguing tax policies. All three papers are ready to be submitted to peer-reviewed journals for publication. I have plans to submit the first paper to the Journal of Public Economics and Journal of Financial Economics with my supervisor Dr. Peter Klein, second one to the Journal of Finance and Journal of Empirical Finance as a sole author, and the final one to Journal of Accounting and Public Policy and Journal of Accounting and Economics with Dr. Steeve Mongrain at SFU after my dissertation.
I believe my four years of PhD level research work under Dr. Peter Klein can open the doors to do more research on the effects of other tax regimes, such as corporate taxes, dividends taxes etc., on capital budgeting, capital structure, and dividend policy of Canadian and U.S. firms. For future papers, I have plans to investigate how firms access the institutional financing and to what extent U.S. and Canadian firms use trade credit as a short-term source of financing. On the derivative side, I am planning to have co-authored papers on counterparty credit risk and currency options. In a different paper, I also plan to study the impact of a new capital gains tax policy for Canada, higher tax rate for short-term holdings and a lower tax rate for long-term holdings, on the capital stock, liquidity, tax revenue, and welfare gain of Canada.