Aaltodoc publication archive (Aalto University institutional repository)
School of Business | Department of Finance | Finance | 2013
Thesis number: 13273
Study of share repurchases and cash holdings: Nordic evidence
|Title:||Study of share repurchases and cash holdings: Nordic evidence|
|Year:||2013 Language: eng|
|Department:||Department of Finance|
|Index terms:||rahoitus; financing; osakkeet; shares|
» hse_ethesis_13273.pdf size:510 KB (521395)
|Key terms:||share; repurchase; buyback; excess; cash; holding|
This Master's Thesis attempts to expand on the existing research regarding the determination of share repurchases using Northern European evidence. The paper examines the popular theory of excess cash on share repurchases by testing the significance of previously applied variables measuring excess cash holdings of companies. In the research three new cash holding models are applied in addition to a model previously applied by Oswald and Young (2007) and the cash-to-total-assets famously applied by Jensen (1986), to define the independent variable excess cash.
In my research I find that while previous definitions of excess cash have resulted in the recognition of the correct, positive, relationship between share repurchases and excess cash, the large volume of research that measure excess cash through a cash-to-total-assets ratio has likely downplayed the significance of the relationship.
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