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Return of Capital: A Legal or a Market Process?

Author

Listed:
  • Robert J. Coombes

    (School of Economic and Financial Studies, Macquarie University. Grateful acknowledgements to our colleagues and to a referee for their helpful suggestions)

  • Richard B. Tress

    (School of Economic and Financial Studies, Macquarie University. Grateful acknowledgements to our colleagues and to a referee for their helpful suggestions)

Abstract

In this paper we examine the implications of existing return of capital procedures which apply to Australian companies with surplus liquid assets which they wish to distribute to shareholders. This process is compared to the alternative of share repurchase. We conclude that the latter method is less time consuming and costly, and provides greater flexibility for management and shareholders without prejudicing the rights of creditors.

Suggested Citation

  • Robert J. Coombes & Richard B. Tress, 1979. "Return of Capital: A Legal or a Market Process?," Australian Journal of Management, Australian School of Business, vol. 4(2), pages 85-96, October.
    • Handle: RePEc:sae:ausman:v:4:y:1979:i:2:p:85-96
    DOI: 10.1177/031289627900400201
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    References listed on IDEAS

    as
    1. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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