Motives for Repurchases by Life-Cycle Explanation

• Main Authors: Wei-Hsien Lai, 賴韋憲
• Other Authors: Yan-zhi Wang
• Format: Others
• Language: en_US
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/42127185616737293173

碩士 === 元智大學 === 財務金融學系 === 96 === In past literatures, signaling hypothesis and free-cash-flow hypothesis are two important motivations of the repurchase announcement. However, there is not the only motive for why firms may buy back their shares in the literature, instead, the motivations of announce repurchase are multiple. In the other words, the signaling hypothesis and the free-cash-flow hypothesis might be coexisting. In particular, the repurchase motives are depending on the each firms’ different characteristics or different investment opportunities, and therefore I use the life-cycle scenario to separate the motivation of announce repurchase. To my major results, the firm in the early stage may buy back their shares because of the signaling motive. In contrast with the signaling motive, the firm in the late stage tends to buy back shares because of the free-cash-flow problem (free-cash-flow hypotheses).