Finance and Accounting Group
Supervisor: Dr Amedeo De Cesari
Stock repurchases are a popular tool to transfer wealth to shareholders, however there are a variety of implications associated with the execution of a repurchase. This empirical research aims to study the relation and impact of different sources of funding for a open market stock repurchase. Myers and Majluf (1984) suggested that that firms consist of both assets and future opportunities and they generally use debt to finance assets and equity to finance opportunities. This research examines situations in which debt, beyond target leverage ratios, is being used to finance stock repurchases, which fall outside the boundaries of assets and growth opportunities.