An empirical study of motivation and implementation performance on stock repurchases of Taiwan stock exchange list companies.

• Main Authors: Tang Wei-Che, 唐瑋澤
• Other Authors: 陳家彬
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/52721333803300311602

碩士 === 國立中興大學 === 企業管理學系研究所 === 90 === According to related literature, there are several hypotheses indicating why corporations buy back their own stocks: signaling hypothesis, free cash flow hypothesis, dividend or personal taxation hypothesis, leverage hypothesis, bondholder expropriation hypothesis, corporate control hypothesis, managerial incentive hypothesis, reissue hypothesis, etc. This study utilizes the use logistic regression model to examine why corporations buy back their own stocks in Taiwan , and which hypothesis is reasonable to explain the incentives of share repurchase. We also use Wilcoxon sign-rank test to examine whether the variables have changed after the share repurchase. Our major results are as follows: the companies with underpriced stock, lower ratio of insider shareholders, more intangible assets, lower debt ratio, and financial forecast revision around the announcements of stock repurchases are more likely to repurchase their stocks. However, idle cash , profitability, and the declaration of cash dividends are irrelevant to the incentives of share repurchases. After the share repurchases, undervalued stock prices has improved, idle cash has decreased relatively, profitability has increased; but insider shareholder ratio, intangible assets and debt ratio have not changed significantly.