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Open Market Repurchases: The Value From Buying Shares At A Discount


  • Gary E. Porter
  • Rodney L. Roenfeldt
  • Neil W. Sicherman


This article shows that share repurchase announcements create value for shareholders when the shares of the industrial firm sell at a discount from the value of the underlying assets, even when shareholders and managers share full information about the firm's prospects and the firm's operating performance is not expected to improve. The value created by capturing the discount on the repurchased shares is a function of only two variables: the percentage discount prior to the announcement and the proportion of shares to be repurchased. 2000 Morgan Stanley.

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  • Gary E. Porter & Rodney L. Roenfeldt & Neil W. Sicherman, 2000. "Open Market Repurchases: The Value From Buying Shares At A Discount," Journal of Applied Corporate Finance, Morgan Stanley, vol. 13(1), pages 122-127.
  • Handle: RePEc:bla:jacrfn:v:13:y:2000:i:1:p:122-127

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    References listed on IDEAS

    1. Stulz, ReneM. & Johnson, Herb, 1985. "An analysis of secured debt," Journal of Financial Economics, Elsevier, vol. 14(4), pages 501-521, December.
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    Cited by:

    1. Stehle, Richard & Seifert, Udo, 2003. "Stock Performance around Share Repurchase Announcements in Germany," SFB 373 Discussion Papers 2003,48, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.

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