Capital Reduction:Compare with Cash Reducing and Treasury Stock from Taiwan's Listed and OTC Companies.

• Main Authors: Zung-Yi Lu, 呂宗益
• Other Authors: Chien-An Wang
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/34932383645866902170

碩士 === 國立暨南國際大學 === 財務金融學系 === 97 === Abstract This dissertation discusses 21 events of reducing capital and 380 events of Treasury stock. This period is from 2001 to 2007. There are 17 companies which use the strategy of reducing capital and 199 companies which use the strategy of Treasury stock. Main 4 topics this dissertation discusses: (1) if the reducing capital and the Treasury stock two strategies are all both positive signal? (2) To discuss the difference of the two strategies in accounting effects from individual. (3) To distinguish the growth rate and economy growth from two strategies from the apects of company and country. (4) To discuss the difference of two strategies in characteristic of company. The results: (1) using the reducing capital and Treasury stock all have the positive signals. (2) of the two strategies both cann’t increase their company accounting effects. (3) cash reducing will make their growth rate decrease. The events of reducing capital will increase when depression and the events of Treasury sotck will decrease when bull. (4) company simultaneously carry on the cash to reduce the capital and the treasury stock, which has the characteristic of business condition stably, the cash abundant, debt lowly, the company scale big, the profit standard high, and the past capital stock expands fast, capital expand fast; But carries on reduces the capital many times, which has the characteristic of the profit standard low, and but uses the Treasury stock has the cash capacity unstable and the debt ratio to be high, the company scale small; uses the cash to reduce the capital have the characteristic of cash current capacity to be abundant, the debt relatively low, the company scale big characteristic; And the dividend are the substitude for Treasury stock. This study has three characteristics and contributions: (1) the study is the first discussed by the aspect of losing weight of enterprice. (2) to discuss the financial decision of the two strategies. (3) this topic for discussion is just for Taiwan, so can solve one of financial theory, free cash flow, a Taiwan particular way to solve.