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Financial characteristics and cancelling treasury shares events


Abdul Latif, Rohaida and Taufil Mohd, Kamarun Nisham and Kamardin, Hasnah (2016) Financial characteristics and cancelling treasury shares events. Indian Journal of Science and Technology, 8 (32). pp. 1-6. ISSN 0974-6846

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Abstract

Background/Objectives: This study explores the incidence of cancelling treasury shares events in Malaysia and examines the financial characteristics of companies that are more likely to cancel their shares. Methods/Statistical Analysis: The study utilizes descriptive analysis to assess the incidence of cancelling treasury share events among non-financial and non utility Malaysian companies.Tobit regression analysis is used to gauge the relationship between firm financial characteristics and the incidence of cancelling treasury share events. Findings: There were a total of 175 events of cancelling treasury shares occurred between the years 2001 and 2012. This study finds that profitability positively and significantly affects the decision to cancel treasury shares, while excess cash flows negatively influence a firm’s decision to cancel treasury shares.Furthermore, smaller size companies are more likely to engage in cancelling their shares. Application/Improvements: The study finds that smaller firms are more likely to cancel their treasury shares as these companies may have severe information asymmetry problems.

Item Type: Article
Uncontrolled Keywords: Event Study, Financial Characteristics, Firm Performance, Share Repurchases, Treasury Shares
Subjects: H Social Sciences > HG Finance
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User: Dr. Rohaida Abdul Latif
Date Deposited: 16 Nov 2016 01:55
Last Modified: 16 Nov 2016 01:55
URI: http://repo.uum.edu.my/id/eprint/19696

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