Well, I bet many will question which one is better. I am on my way doing a research on Share Buyback using Buy and Hold calculation method for public listed firm in KLSE. Well so far, not many of the share buyback companies in KLSE show positive return after they initiated share buyback program.
A simple explanation for firms to choose share buyback rather than dividend is because they have some extra cash that is derived from cost saving rather than operation earning. This is because such extra cash from cost saving only rarely happen. If firm choose to distribute dividend, investor will expect more in coming years. If the firm fails, it will perceived as negative impact to the firm's image. Will update everyone when I finish my research. This is also my mba thesis. Hope to finish it as soon as possible to graduate.
Thanks for the short comparison!
ReplyDeleteAustralian Shares to Buy