Stock Repurchase and Excess Returns: An Empirical Examination
AbstractThe excess returns associated with repurchase announcements are viewed largely as a reaction to management's statement that the firm's shares are underpriced; management's signal provides new information that enhances the firm's market value. Although earlier studies have found the excess return to be closely related to the premium set by management, other factors play a part in determining both the market reaction and the premium level set by management. Among these factors are relative market capitalization, holding by institutions, immediate alternative uses for cash, the level of insider control, recent stock price performance, the relative size of the tender offer, and the resultant change in the firm's capital structure. Copyright 1990 by MIT Press.
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Bibliographic InfoArticle provided by Eastern Finance Association in its journal The Financial Review.
Volume (Year): 25 (1990)
Issue (Month): 1 (February)
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- Michael Firth & T. Y. Leung & Oliver M. Rui, 2008.
"Double Signals or Single Signal? An Investigation of Insider Trading Around Share Repurchases,"
222008, Hong Kong Institute for Monetary Research.
- Firth, Michael & Leung, T.Y. & Rui, Oliver M., 2010. "Double signals or single signal? An investigation of insider trading around share repurchases," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(4), pages 376-388, October.
- Bechman, Ken L. & Raaballe, Johannes, 2006. "Taxable Cash Dividends," Working Papers 2005-4, Copenhagen Business School, Department of Finance.
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