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Additional evidence on the frequency of share repurchases and managerial timing

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  • De Ridder, Adri

Abstract

Are firms with multiple share repurchase programs associated with positive abnormal performance and is the performance related to cash flow levels in firms? Do managers repurchase the firm's shares at a lower price than a naïve investor? In this paper, I analyze these questions using a unique hand-collected data set with detailed information of repurchase transactions. The findings show that firms with multiple repurchase programs have returns that exceed the return on stocks in firms with fewer programs by 79 basis points per month and that firms with high cash flows have higher returns than firms with low cash flows. The results do not support the idea that managers can repurchase the firm's stocks at a lower price than an average investor can.

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  • De Ridder, Adri, 2015. "Additional evidence on the frequency of share repurchases and managerial timing," The Quarterly Review of Economics and Finance, Elsevier, vol. 56(C), pages 154-164.
    • Handle: RePEc:eee:quaeco:v:56:y:2015:i:c:p:154-164
    DOI: 10.1016/j.qref.2014.09.011
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    2. Ni‐Yun Chen & Chi‐Chun Liu, 2021. "Share repurchases and market signaling: Evidence from earnings management," International Review of Finance, International Review of Finance Ltd., vol. 21(4), pages 1203-1224, December.

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    More about this item

    Keywords

    Multiple share repurchases; Abnormal returns; Managerial timing;
    All these keywords.

    JEL classification:

    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

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