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The ability of listed companies to optimize their capital structure, shape their distribution policy and fight hostile takeovers by repurchasing their own shares

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  • Daniel Schwarz

    (Pan-European University, Slovakia)

Abstract

The management of listed companies is faced with the decision to distribute the annual surplus to the shareholders in total or to reinvest it in order to achieve the company's goals in order to sustain the continued existence and growth of the company. In order to avoid a conflict of interest between the various parties of a stock corporation, compensation must be found so as not to jeopardize the company's goals and priorities. An optimization of the capital structure and a balanced dividend policy should contribute to the satisfaction of all stakeholders of a company. This article investigates the possiblity by using a share buy-back programm, a kind of capital reduction, as a strategic measures to reach both oft he goals. Sustainability in terms of financial stability should be at the forefront of management and ownership.

Suggested Citation

  • Daniel Schwarz, 2018. "The ability of listed companies to optimize their capital structure, shape their distribution policy and fight hostile takeovers by repurchasing their own shares," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(2), pages 636-648, December.
    • Handle: RePEc:ssi:jouesi:v:6:y:2018:i:2:p:636-648
    DOI: 10.9770/jesi.2018.6.2(12)
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    References listed on IDEAS

    as
    1. Merton H. Miller & Franco Modigliani, 1961. "Dividend Policy, Growth, and the Valuation of Shares," The Journal of Business, University of Chicago Press, vol. 34, pages 411-411.
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    More about this item

    Keywords

    Buy-Back Program; reconciliation of interests; capital reduction; optimal capital structure; distribution policy; hostile takeover;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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