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Optimal capital structure and share repurchases: a case study of Anglo American Plc
During 2006, AAL adopted and implemented its first share repurchase program, which continued up until its suspension in 2008. While management stated that share repurchases would only be done in the interest of shareholders, the repurchase program was disastrous for shareholder value. Management als...
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| Format: | Thesis |
| Language: | English |
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Department of Finance and Tax
2016
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| Summary: | During 2006, AAL adopted and implemented its first share repurchase program, which continued up until its suspension in 2008. While management stated that share repurchases would only be done in the interest of shareholders, the repurchase program was disastrous for shareholder value. Management also stated that share repurchases provide the firm with flexibility regarding its capital structure. We investigated the capital structure of AAL for the years 2004 to 2012 from an optimal capital structure perspective. Using a CAPM approach, we find no evidence that AAL targeted or implemented a capital structure, which could be considered optimal. |
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