Share Buybacks

Inhaltsverzeichnis (Table of Contents)

• 1. Introduction
• 2. The State of Affairs in Buybacks
• 2.1. Reasons and Motivations
• 2.1.1. Long-term Shareholders
• 2.1.2. Managers
• 2.1.3. Short-term Shareholders
• 2.2. Requirements
• 2.2.1. German Law
• 2.2.2. Types of Share Buybacks
• 2.3. Effects
• 2.3.1. Market Price Effects
• 2.3.2. Earnings per Share Effects
• 2.3.3. Other Effects
• 3. Empirical Research
• 3.1. Sample Description and Empirical Method
• 3.2. Findings
• 4. Conclusion

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This thesis provides a comprehensive analysis of share buybacks, critically evaluating their motivations, requirements, and effects on company performance. It explores the theoretical framework surrounding buybacks and conducts empirical research on selected companies, aiming to understand the practical implications of these financial transactions.

• Motivations for Share Buybacks: Examining the perspectives of different stakeholders, including long-term shareholders, managers, and short-term shareholders.
• Legal Framework and Types of Buybacks: Analyzing the legal requirements and different types of share buyback transactions within the German context.
• Impact of Buybacks on Market Price and Earnings: Investigating the potential effects of buybacks on stock price and earnings per share.
• Empirical Research: Conducting an empirical study on a selected sample of companies to analyze the actual effects of buybacks in practice.
• Implications for Company Performance: Assessing the overall implications of share buybacks for company performance and shareholder value.

Zusammenfassung der Kapitel (Chapter Summaries)

• Chapter 1: Introduction - This chapter provides an overview of the research topic and its significance, outlining the objectives and structure of the thesis.
• Chapter 2: The State of Affairs in Buybacks - This chapter explores the theoretical framework surrounding share buybacks, examining the reasons and motivations behind them, the legal requirements, and the potential effects on company performance.
• Chapter 3: Empirical Research - This chapter presents the empirical research conducted in the thesis, including the sample description, research method, and findings related to the effects of buybacks.

Schlüsselwörter (Keywords)

Share buybacks, corporate finance, shareholder value, market price effects, earnings per share, empirical research, German law, financial transactions, company performance, stakeholder perspectives, long-term shareholders, managers, short-term shareholders.

Frequently Asked Questions

What is a share buyback?

A share buyback occurs when a company repurchases its own outstanding shares from the marketplace, reducing the number of shares available.

Why do companies choose buybacks over dividends?

Buybacks offer more flexibility than dividends and can signal that management believes the stock is undervalued, potentially increasing earnings per share.

What are the main motivations for managers to perform a buyback?

Managers may use buybacks to adjust the capital structure, prevent hostile takeovers, or improve financial ratios like Return on Equity (ROE).

How does German law regulate share repurchases?

The thesis explores the legal requirements in Germany, which became significantly more relevant after regulatory changes in 1998.

What are the market price effects of a buyback announcement?

Empirical research on DAX 30 companies shows that buyback announcements often lead to positive short-term market price changes due to signaling effects.