THE STUDY ON HOW THE DECLARATION OF CAPITAL REDUCTION WILL AFFECT STOCK PRICE – IN THE CASE OF PUBLIC MARKET ELECTRONIC COMPANIES
碩士 === 國立臺北大學 === 企業管理學系 === 95 === To pursue a better performance in finance, more and more Taiwan stock listed companies reduce their capital. In Taiwan, capital can be reduced in two ways: capital decrease according to the Corporate Regulation and the treasury stock purchasing and capital withdra...
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| Format: | Others |
| Language: | zh-TW |
| Published: |
2007
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| Online Access: | http://ndltd.ncl.edu.tw/handle/87131280768409231971 |
| Summary: | 碩士 === 國立臺北大學 === 企業管理學系 === 95 === To pursue a better performance in finance, more and more Taiwan stock listed companies reduce their capital. In Taiwan, capital can be reduced in two ways: capital decrease according to the Corporate Regulation and the treasury stock purchasing and capital withdraw by the Security Transaction Regulation. We focus on the Corporate Regulation cases.
Corporate Regulation allows company to reduce capital in two ways: to reduce the shares without any compensation and to reduce the shares with cash. We wonder whether the stock price reflection will be the same after the capital reducing was announced.
This study applies event study method to check the abnormal return (AR) of the two different ways. The samples are made up of the electronic companies which had declared for capital reducing in2004 to April-2007.
In the case of reducing capital without any compensation, there is a negative abnormal return and the cumulated abnormal return declined. It means that the capital reducing is a signal of negative return. However in the case of reducing capital with cash, there is 1.19% positive abnormal return in +1 day. It seem market prefer this way of reducing capital.
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