| Summary: | 碩士 === 國立中山大學 === 企業管理學系研究所 === 90 === There are 506 announcements of stock repurchases from 1999.8.9 to the end of 2001 after Taiwan adopting the law of treasury stock. It’s obviously that companies issued in the stock market need the law because the percent of applying is up to 37.23%. We study the announcements during 1999.8.9 to 2001.12.31 and try to find out the motives of stock repurchases. For understanding the effect of market prediction, we try to set up a prediction model and separate the result of market prediction to right and wrong. Regarding the factor of affecting the cumulative abnormal return after announcement, we argue that it’s quite similar with cash dividend announcement as companies signal the good news of becoming better in the future. It infers that the effect of announcement relates to former accounting information. The result show as following: (1) the motives to stock repurchases are consistent with optimal leverage ratio hypothesis, dividend or tax hypothesis. The companies would intend to stock repurchase when the board of directors had higher collateral ratio or the enterprise ever used the subsidiary company to repurchase the stock. (2) we can’t prove that the unexpected announcement has higher abnormal return than the expected one. (3) we also can’t prove that the former accounting information affect the abnormal return, but we can see the it positively relates to the free cash flow, undervaluation, and the degree of information asymmetry.
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