The motivations and returns of Stock Repurchase in Taiwan’s Listed Companies: S Company Exemplified

• Main Authors: Chang, Ming-Hui, 張憫慧
• Other Authors: Wang, Wen-Jie
• Format: Others
• Language: zh-TW
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/62908105292311495113

碩士 === 國立交通大學 === 管理學院高階主管管理碩士學程 === 97 === In accordance with the traditional thinking of the Company Law, the "principle of the prohibition, with the exception of permit" is adopted for buying back shares of its own principles. Due to the Asian financial turmoil during year 1986, the law to Taiwan’s system of treasury stock was amended and implemented in 1989 considering the stability of stock market. In 2008, the global economy is facing unprecedented financial crisis, this study is to explore whether or not the treasury stock system can indeed play a role to save the company's share price. An IC design company was selected as a case study of this study. The first chapter is to introduce the study background, motivation of the research methodology, and research framework. The second chapter describes the current status and system of buying back treasury stock in listing companies. In addition to introduce the present regulations of Taiwan, as well as describing the foreign law for readers to survey the difference between Taiwan’s law and foreign. In the mean time, the accounting processes that treasury stock companies should have when buying back treasury stock were described. The assessment of Taiwan's present system of treasury stock was also conducted. Finally, all the listing companies who have implemented treasury stock system, as well as their purpose of repurchase were analyzed by statistical methods. Chapter three describes the motivations of buying back shares. For example, Excess Capital Hypothesis, Undervaluation Hypothesis, Optimal Leverage Ratio Hypothesis, Management Incentive Hypothesis, and etc. Chapter four is the case study of S company. In addition to introducing the company's treasury stock repurchase program, decision-making model, demonstration and assessment of the implementation giving conditions of treasury stock in S company, as well as the analysis of S company implementing treasury stock system under the global financial crisis in 2008, and the impact of the company's financial circumstances before and after buy-back were also conducted. Chapter five is the conclusion.