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- Title
Shares and Debt Securities Issues in the Euro Zone.
- Authors
Pătraşcu (Sandu), Diana - Ramona
- Abstract
Recently, studies have identified a number of interesting trends in the international practice of two important decisions for a company: the issue of shares and debt securities. The issue of shares followed by their frequent repurchase in order to increase the stock price and facilitate the execution of share option plans granted to employees, financing through bonds, instead of shares, in order to avoid future liabilities, such as providing dividends to shareholders, are some of the dishonest practices we mention. Considering these ideas, we used the European Central Bank official data associated with the issuance of shares as well as bonds, made by nonfinancial companies resident in the euro area, in order to study the relations between these two controversial decisions. The database was created using monthly reports published by the ECB from 2005 to 2012. To what extent shares issues of non-financial companies in the euro area depend or are explained by share buybacks, bond issues or redemptions, are some of the questions we seek to answer. As research methods, we chose correlation and multiple regression analysis, being permanently aware that we worked with global numerical data. The conclusions of the study proved to be of interest. We found a weak and positive correlation between share repurchases and quoted shares issues and no important relations between the issue of shares and debt securities, between debt securities issues and share repurchases.
- Subjects
EUROZONE; ECONOMIC decision making; STOCK prices; FINANCIAL security; REDEMPTION of securities
- Publication
Economic Insights - Trends & Challenges, 2014, Vol 66, Issue 1, p107
- ISSN
2284-8576
- Publication type
Article