Stock Repurchases in the 21st Century Theory Evicence and Implications
Stock repurchases are an important tool for returning cash back to shareholders. Since their regulation in the US in the mid 1980s, stock repurchases have experienced dramatic growth. EU countries, however, started allowing public...
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Información proyecto STOCK REPURCHASES
Líder del proyecto
TEL AVIV UNIVERSITY
No se ha especificado una descripción o un objeto social para esta compañía.
TRL
4-5
Presupuesto del proyecto
100K€
Fecha límite de participación
Sin fecha límite de participación.
Descripción del proyecto
Stock repurchases are an important tool for returning cash back to shareholders. Since their regulation in the US in the mid 1980s, stock repurchases have experienced dramatic growth. EU countries, however, started allowing public corporations to buy back their shares only in the late 1990s. Moreover, firms in EU countries that do start repurchases fail complete them. For example, UK and French firms end up repurchasing only 28% and 10% of their declared intention, respectively, in comparison to about 80% in the US. Without good free cash payout mechanisms companies and markets cannot be efficient, and economies cannot thrive. Why do repurchases efficiently disburse cash in the US but not in the EU? What can be done to make repurchases work in EU countries? The purpose of this project is to help understand the properties and limitations of repurchases. The results will provide guidelines to governments how to regulate repurchases, to firms when to repurchase, and to investors how to adjust their investment strategies when firms they invest in announce a repurchase.