Download or read book An Analysis of Repurchase Behavior in Open Market Stock Buyback Programs written by Tony Altobelli and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Boards of directors authorize billions of dollars in open market (OM) stock buybacks each year, but little is known about how many shares are actually repurchased. This paper analyses the repurchase behavior of firms that announce OM buyback programs. We find that OM announcements are credible signals. On average, firms repurchase more shares than originally authorized over the four quarters following the announcement, though there is considerable variation across firms. We examine the factors influencing repurchase behavior, and find that repurchases in a given quarter are associated with a number of variables, including past and current returns, profitability, and prior repurchase activity. We also investigate how shares outstanding change following OM program announcements. Firms in our sample actively issue shares over the test period so that the average decrease in shares outstanding is only about 20% of the number repurchased. For the most part, changes in shares are influenced by the same factors affecting repurchases and in the predicted direction.

Download or read book An Analysis of Open Market Share Repurchases written by Stefan Obernberger and published by . This book was released on 2014 with total page 165 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Payout Policy written by Harry DeAngelo and published by Now Publishers Inc. This book was released on 2009 with total page 215 pages. Available in PDF, EPUB and Kindle. Book excerpt: Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.

Download or read book Share Repurchases written by Theo Vermaelen and published by Now Publishers Inc. This book was released on 2005 with total page 117 pages. Available in PDF, EPUB and Kindle. Book excerpt: This survey derives some of the key results on the taxation of international investment in variants of one model of multinational investment.

Download or read book Market Underreaction to Open Market Share Repurchases written by David Ikenberry and published by . This book was released on 1994 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine long-run firm performance following open market share repurchase announcements which occurred during the period 1980 to 1990. We find that the average abnormal four-year buy-and-hold return measured after the initial announcement is 12.1 percent. For `value' stocks, companies more likely to be repurchasing shares because of undervaluation, the average abnormal return is 45.3 percent. For repurchases announced by `glamour' stocks where undervaluation is less likely to be an important motive, no positive drift in abnormal returns is observed. Thus, at least with respect to value stocks, the market errs in its initial response and appears to ignore much of the information conveyed through repurchase announcements.

Download or read book Payout Policy written by and published by . This book was released on 2007 with total page 83 pages. Available in PDF, EPUB and Kindle. Book excerpt: Dividend policy continues to be among the premier unsolved puzzles in finance. A number of theories have been advanced to explain dividend policy. This e-book briefly reviews the principal theories of payout policy and dividend policy and summarizes the empirical evidence on these theories. Empirical evidence is equivocal and the search for new explanation for dividends continues.

Download or read book Open Market Share Repurchases in Europe written by Meziane Lasfer and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Announcement effects of share repurchases in India Abnormal returns or information asymmetry written by Jonas Wirth and published by GRIN Verlag. This book was released on 2023-06-05 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2022 in the subject Economics - Finance, grade: 1.0, University of Passau, language: English, abstract: In this paper, market-based and firm-specific determinants are introduced to measure their association with abnormal returns around the announcement of a share buyback conducted through tender and open market offers in India. To test the valuation effect of market-based variables: uncertainty, which is determined by implied market volatility and economic policy uncertainty. Liquidity risk, which is investigated through two illiquidity proxies and the impact of the monetary environment, represented by the three-month Mumbai Interbank Offer Rate (MIBOR) and the gold price are included. In addition, the main firm-specific hypotheses are tested to identify potential key drivers. The valuation effects examined cover the period from April 1, 2011, to March 31, 2021, during which a total of 359 share repurchases were made, 231 through tender offer and the remaining 128 through the open market. Beside separating the two buyback methods, I examine different categories in addition to the full sample to determine whether market participants' reaction to share repurchase announcements leads to abnormal returns. The rest of the paper is organized as follows. Next section provides an overview about the regulatory framework of share buyback in India. Section 3 states a brief overview about the share repurchase literature with reference to uncertainty and liquidity in global context and firm-specific literature in Indian context. Then the hypotheses are stated. Sections 5 and 6 present the methodology and data, and section 7 presents the empirical results. Section 8 provides concluding remarks.

Download or read book Stock repurchase and abnormal returns in den USA and Germany written by Jan Heise and published by GRIN Verlag. This book was released on 2008-02-26 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2006 in the subject Business economics - Investment and Finance, grade: A+, University of Massachusetts - Dartmouth (Charlton Business School), course: Masters Kurs: Finance for Decision Making, language: English, abstract: Two of the most prominent trends in corporate finance in the U.S. during the past 15 years are the growing popularity of share repurchases and the decreasing popularity of dividends. Repurchasing stocks is another way for managers to distribute money to shareholders, thus it plays an equivalent role as dividend payments. Consistent with Grullon and Michaely (2002) U.S. corporations distribute cash by rather repurchasing stock than by paying dividends to shareholders. Fama and French (2001) argue in the same direction. Their study provides evidence that the proportion of corporations paying cash dividends fell from 66.5% in 1978 to 20.8% in 1999. According to Grullon’s (2000) findings the total of share repurchases exceeded the total of dividend payment for industrial firms in 1998. In Germany share repurchases were highly restricted until 1998. As a consequence the volume of repurchases was small. The popularity of repurchases in the U.S. and in other countries was a strong argument for lifting the restrictions. These days, German companies announce buybacks regularly. Although capital markets in the USA and Germany are efficient the impact of stock repurchase programs differ, resulting in higher stock performance after buyback announcements in Germany than in the USA.

Download or read book Rule 10b 18 SEC written by Douglas O. Cook and published by . This book was released on 2003 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Value of Open Market Repurchases of Closed End Fund Shares written by Gary E. Porter and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We illustrate the value to shareholders when closed-end funds repurchase shares at a discount from net asset value. Repurchases increase share price even when there is no asymmetric information concerning the value of the underlying assets and the percentage discount remains unchanged following the repurchase. Expected gains to shareholders are derived from capturing the discount on the assets associated with the shares repurchased. In an analysis of 27 open market repurchase announcements by closed-end funds, the regression coefficient estimate that measures the association between the actual excess return and the expected increase in share price is essentially 1.0.

Download or read book Open Market Versus Tender Offer Share Repurchases A Conditional Event Study written by and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The Finance Division of the Faculty of Commerce and Business Administration at the University of British Columbia in Vancouver, British Columbia, Canada, presents the full text of a working paper entitled "Open Market Versus Tender Offer Share Repurchases: A Conditional Event Study," by Kai Li and William McNally. The paper discusses firms' choice of the repurchase program and the links between that choice, the determination of repurchase terms, and the announcement period price reaction.

Download or read book The Effect of Common Stock Repurchase on Securityholder Returns written by Larry York Dann and published by . This book was released on 1980 with total page 366 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Open Market Share Repurchases in Germany written by Christian Andres and published by . This book was released on 2016 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the decision to announce an open market share repurchase and the share price reaction to the announcement. We use a conditional estimation approach which takes into account that the repurchase decision is made rationally and that, consequently, there is a potential selection bias. This approach requires a "non-event sample" of firms that could reasonably be expected to announce a repurchase but did not. The specific institutional rules for share repurchases in Germany allow us to construct such a sample. We find that a conditional approach yields results that are qualitatively comparable but differ in detail from those obtained using a non-conditional approach. We confirm earlier findings of negative share price performance prior to the repurchase announcement and positive and significant announcement day abnormal returns. The results of our probit models are consistent with the free cash flow hypothesis and provide at least partial support for the rent extraction, signalling, and capital structure hypothesis. The results of the cross-sectional regressions provide support for the signalling hypothesis once we control for selection bias.

Download or read book An Empirical Study of the Information Content and Insider Trading Around Open Market Share Repurchase Announcements written by Liang Feng and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper employs a conditional event study to analyze managers' motives to announce a share repurchase while at the same time exploring the factors that drive a firm's abnormal announcement return. We find that firms that have more free cash flow and less debt are more likely to initiate a repurchase. We also document that the market reacts more positively to announcements made by firms that exhibit poor pre-announcement stock price performance as well as firms that seek to buy back a higher percentage of shares. We do not find any significant positive correlation between managers' private information and unexplained abnormal returns, which suggests that the market's discovery of insiders' private information has already been incorporated into abnormal returns, or that the announcement return may be explained entirely by public information as predicted by the agency hypothesis. This study also provides complementary evidence on the information content of open market repurchases by analyzing insider trading activities around the repurchase announcements. We show that in general, insiders in repurchasing firms tend to decrease their selling activity and increase their buying activity before repurchase announcements. After the announcement, the differences in insider trading activity between repurchasing firms and non-repurchasing firms are largely insignificant.

Download or read book Market Reaction to Open market Stock Repurchase Announcements written by Titos E. Ritsatos and published by . This book was released on 1999 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Open Market Share Repurchases and Earnings Management written by Arturo Rodriguez and published by . This book was released on 2015 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the market efficiency in processing manipulated accounting statements, and provide an explanation for the long-run performance anomaly associated with open market share repurchases. We find strong evidence that repurchasing firms understate their earnings report around repurchases announcements. Furthermore, we find that the market does not identify the earnings manipulation when the repurchase is announced, and that discretionary accruals can explain a significant part of long-term positive returns following repurchases. This study also suggests that analysts are misled by the use of discretionary accruals. Analysts are more pessimistic for companies reporting low discretionary accruals. Further investigation indicates that discretionary accruals are related to the economic benefits at stake to the managers. Our analysis indicates that managers with higher ownership in the firm are more likely to manage earnings down. Altogether the evidence is consistent with the managerial opportunism hypothesis.