| Summary: | 碩士 === 輔仁大學 === 管理學研究所 === 96 === The purpose of this research is to discuss the effect of capital reduction on the stock performance and financial performance for each period of announcement.
The empirical results of this research are as follows:
1. Investor interpreted capital reduction as a negative signal, because the stock price reaction is significantly adverse.
2. With regard to the sample of capital reduction with seasoned equity offering, the negative stock price reaction is smaller than the sample with only capital reduction.
3. The larger the degree of capital reductions, the larger the negative stock price reaction is.
4. When the stocks relisted in the market, the abnormal return of sample company with a higher degree of capital reductions, is worse than the others return in all samples.
Though the announcement of capital reductions to counterweight the previous loss is a negative signal, the stock price reaction of the sample with seasoned equity offering is better than the other sample with only capital reduction. Besides, a company reduced its capitals which implied its poor operation, the stock price declined and was much lower than if was before. At the same time, the sample of announcement to reduce the capital with the poor (good) stock price performance, the stock price went up after relisting in the market. To test and verify if capital reductions can improve the performance, the study founded that reduce the capital can certainty improve the financial performance, especially with the sample with seasoning equity offering capital.
|
|---|
