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The Role of Executive Stock Options in REIT Repurchases

Listed author(s):
  • Chinmoy Ghosh


    (University of Connecticut Storrs, CT 06269-1041)

  • John P. Harding


    (University of Connecticut Storrs, CT 06269-1041)

  • Ozcan Sezer


    (University of Toledo Toledo, OH 43606-3390)

  • C.F. Sirmans


    (University of Connecticut Storrs, CT 06269-1041)

This paper examines the relationship between managerial stock option holdings and the decision to announce a repurchase of the firm’s common stock. Managerial stock option holdings should reinforce the traditional undervaluation, free cash flow, and capital structure motives for repurchases by helping to align the objectives of management and shareholders. Data from the Real Estate Investment Trust (REIT) industry during the peak period of repurchase activity (1997?999) are used to estimate a logit model of the decision to announce a repurchase program. After controlling for the standard motivations discussed in the literature, the findings reveal that managerial option holdings are positively related to the likelihood of a repurchase announcement.

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Article provided by American Real Estate Society in its journal journal of Real Estate Research.

Volume (Year): 30 (2008)
Issue (Month): 1 ()
Pages: 27-44

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Handle: RePEc:jre:issued:v:30:n:1:2008:p:27-44
Contact details of provider: Postal:
American Real Estate Society Clemson University School of Business & Behavioral Science Department of Finance 401 Sirrine Hall Clemson, SC 29634-1323

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Order Information: Postal: Diane Quarles American Real Estate Society Manager of Member Services Clemson University Box 341323 Clemson, SC 29634-1323
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