The Announcement Effect and Follow-up Influences of Enterprise Reducing Capital

• Main Authors: Chia-Yu Shen, 沈家瑜
• Other Authors: 許永聲
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/57785443264346339267

碩士 === 國立中興大學 === 會計學研究所 === 96 === Recently, while there are increasingly cases of capital reduction conducted by Taiwan Stock Exchange Corporations, due to the interior abundant cash without great capital expenditure in the future, or to improve the financial affair rating problems such as decreasingly ROE and earnings per share caused by excessively inflated capital stock, the corporations decide to conduct capital reduction in order to reduce capital stock and carry corporate downsizing out. The emphasis of this study is centering on what the messages made from those enterprises that conducted capital reduction are, and the interpretations of Capital Reduction made by marketplace. In addition, this study treat further whether capital reduction will affect stock liquidity, and through the relation between capital reducing and operating performance, to treat if capital reduction conducted by Taiwan Stock Exchange Corporations will work upon operating performance in the future. This research uses Event Study Method with the estimation of buy-and-hold return and abnormal return by Barber and Lyon (1997) to proceed analysis; to treat and verify the abnormal return after the announcement of returning stocks by cash to stockholders. In addition, this research is to inspect the influences by the announcement of capital reduction on liquidity and operating performance through OLS Regression Analysis. Conclusion for this research: 1.After the announcement of capital reduction, the empirical results reveals that BHAR on declaration date is greater than 0%, and after 1~120 days by declaration date, BHAR arises obviously; therefore, the effect is positive on stock price after the announcement. Relatively, there is not much change on BHAR before declaration date. Consequently, stock price have not reacted before the announcement. 2.This research measures the variation before and after capital reduction by stock turnover and stock volume, and results turns significantly positive correlation; indicating that the liquidity is higher after the announcement of capital reduction. 3.This research uses Sales Margin Profit (SMP), ROA, ROE and Tobin''s Q (TOBQ) for proxies of operating performance, and the results reveals insignificantly negative correlation on sales margin profit (SMP) and Tobin''s Q (TOBQ) after capital reduction while positive correlation on ROA and ROE. This result reveals that capital reduction adopted policy can promote the effect of assets turnover ratio; namely, the operating performance is better after conducting capital reduction.