Original title: Zpětné odkupy akcií a implikace pro finanční stabilitu
Translated title: Buybacks to Bailouts: Firm Behavior and Implications for Financial Instability
Authors: Curran, Kevin ; Baxa, Jaromír (advisor) ; Dědek, Oldřich (referee)
Document type: Master’s theses
Year: 2021
Language: eng
Abstract: Share repurchases reached a decade-high level in 2019, just as US equity indices reached a historical zenith, a move in tandem that supports more than merely a correlative relation. However, this relationship moves beyond that of just a close tandem move in indices alongside share repurchases, but to the behavior of firms which began to leverage themselves in order to promote the evermore profitable strategy of large buyback programs. Those repurchases indicate an idiosyncratic and procyclical leveraging that, while much smaller in scope and less combustible by lack of derivative amplification, led to the gorging on unsustainable debt described by Hyman Minsky and experienced in the Great Financial Crisis in the banking industry. In this case, the 'Minsky moment' that may have inevitably popped the self-promotion bubble came in the form of the 'black swan' event of the coronavirus outbreak. This paper aims to historically frame the issues, with delimitation of the effect of buybacks from 2009 to early 2020 with scant reference to historical factors influencing the increased usage of share repurchase programs. The analysis within this historical scope will reflect empirical measures on the market-wide level of share buybacks and debt levels alongside the concurrent equity index acceleration....
Keywords: Buyback; Capital Markets; Corporate Debt; Federal Reserve; Financial instability; Free Cash Flow Bailout; Leverage; Share Repurchase

Institution: Charles University Faculties (theses) (web)
Document availability information: Available in the Charles University Digital Repository.
Original record: http://hdl.handle.net/20.500.11956/127909

Permalink: http://www.nusl.cz/ntk/nusl-448469


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Universities and colleges > Public universities > Charles University > Charles University Faculties (theses)
Academic theses (ETDs) > Master’s theses