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Scrip Dividends and Share Buyback Strategies Based on Volatility

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Advances in Engineering Networks (ICIEOM 2018)

Part of the book series: Lecture Notes in Management and Industrial Engineering ((LNMIE))

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Abstract

The number of listed companies offering alternatives to cash dividends is increasing in Europe. Companies can reduce the cash outflows by giving shareholders the option to receive either shares or cash. Some investors favor scrip dividends due to the implicit-free call option attached to the scrip distributions, and recent studies confirm that the market does not react negatively, helping to reduce the agency problem. Additionally, companies can avoid dilution by repurchasing the shares offered in the scrip. Repurchase strategies using volatility and derivatives can guarantee a lower repurchase price, improving the capital ratios of the company and increasing BVPS.

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Author information

Authors and Affiliations

  1. Dpto. de Organización, Administración de Empresas Y Estadística, ETS de Ingenieros Industriales, Universidad Politécnica de Madrid (UPM), Madrid, Spain

    Angel Huerga & Carlos Rodríguez-Monroy

Authors
  1. Angel Huerga
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  2. Carlos Rodríguez-Monroy
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Corresponding author

Correspondence to Carlos Rodríguez-Monroy .

Editor information

Editors and Affiliations

  1. Department of Business Administration, Management and Product Design, Universitat de Girona, Girona, Spain

    Rodolfo de Castro

  2. Department of Business Administration, Management and Product Design, Universitat de Girona, Girona, Spain

    Gerusa Giménez

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Huerga, A., Rodríguez-Monroy, C. (2020). Scrip Dividends and Share Buyback Strategies Based on Volatility. In: de Castro, R., Giménez, G. (eds) Advances in Engineering Networks. ICIEOM 2018. Lecture Notes in Management and Industrial Engineering. Springer, Cham. https://doi.org/10.1007/978-3-030-44530-0_4

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  • DOI: https://doi.org/10.1007/978-3-030-44530-0_4

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-44529-4

  • Online ISBN: 978-3-030-44530-0

  • eBook Packages: EngineeringEngineering (R0)

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