Download or read book The Credibility of Open Market Share Repurchase Signaling written by Ilona Babenko and published by . This book was released on 2013 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Open market share repurchase announcements are commonly associated with equity undervaluation, but their signal about firm value can often be misleading. We conjecture that executives who buy shares of their firm before an announcement add credibility to the undervaluation signal. Consistent with this hypothesis, we find that announcement returns are positively related to past insider purchases, especially for firms that are priced less efficiently. Firms whose insiders bought more shares are also more likely to complete their repurchase plans. Finally, we find that insider purchases predict post-announcement stock returns.
Download or read book Signaling Power of Open Market Share Repurchases in Germany written by Andreas Hackethal and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Noisy Signaling Through Open Market Share Repurchase Programs and Information Production by Institutions written by Thomas J. Chemmanur and published by . This book was released on 2018 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: We propose a “noisy signaling" hypothesis of open market share repurchase (OMSR) programs, where the equity market equilibrium that prevails after OMSR program announcements is a partial pooling rather than a fully separating equilibrium. We argue that two complementary mechanisms, namely, actual share repurchases by firms and information production by institutions, serve to reduce the residual equity market information asymmetry facing firms subsequent to OMSR program announcements. We test the implications of our noisy signaling hypothesis using transaction-level data on trading by institutions and by a subsample of identified hedge funds, and find strong support for the above hypothesis.
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 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 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 Informed Trading and False Signaling with Open Market Repurchases written by Jesse M. Fried and published by . This book was released on 2014 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: Public companies in the United States and elsewhere increasingly use open market stock buybacks, rather than dividends, to distribute cash to shareholders. Academic commentators have emphasized the possible benefits of such repurchases for shareholders. However, little attention has been paid to their potential drawbacks. This Article shows that managers use open market repurchases to indirectly buy stock for themselves at a bargain price. Managers also boost stock prices by announcing repurchase programs they do not intend to execute, enabling them to unload their own shares at a higher price. Such bargain repurchases and inflated-price sales systematically transfer significant amounts of value from public investors to managers, as well as distort managers' payout decisions. The Article concludes by proposing a new approach to regulating open market repurchases: requiring firms to disclose specific details of their buy orders in advance. This pre-repurchase disclosure rule, the Article shows, would undermine managers' ability to use repurchases for informed trading and false signaling, thereby reducing the resulting distortions and costs to shareholders. Moreoever, it would achieve these objectives without eroding any of the potential benefits of repurchases.
Download or read book The Order Submission Behaviors Surrounding Open Market Repurchase Announcements written by Chaoshin Chiao and published by . This book was released on 2007 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper highlights a concern for a link possibly missing in the traditional justification of the signaling hypothesis of open-market repurchases (OMRs). To recover the missing link, we employ the order-level data for the Taiwan stock market to contrast the order submission behaviors among different groups of investors surrounding OMR announcements - who trade the repurchased stocks and how they trade them. As a result, only from the standpoint of price behavior, OMR announcements are reliable signals to which the price reactions of those stocks are favorable. However, the observed order submission behaviors among most investors contradict the essence of the signaling hypothesis.
Download or read book False Signals from Stock Repurchase Announcements written by De-Wai Chou and published by . This book was released on 2004 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the possibility of false signaling by firms announcing open-market stock repurchases. We examine a sample of 281 open-market share repurchases, with the self-styled reason of undervaluation, by firms between 1993 and 1998. Our results showed no evidence of an upward revision in the earnings forecasts of analysts following open-market share repurchase announcements, finding instead, small negative surprise revisions, which contradicts the prevailing empirical evidence. Moreover, we found that surrounding share repurchase announcements, managers manipulated discretionary accruals upward. We posit that this action, on the part of management, is to persuade market participants that the equity of their firm is undervalued. We also found no evidence of the market underreaction phenomenon but did observe negative abnormal returns in the 3- to 12-month period subsequent to the announcement. Overall, our results confirm that with a weaker signaling power, open-market share repurchase programs have been used to send a false signal to the marketplace, by emphasizing an undervalued equity.
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 A Long term Analysis of Significant Share Repurchase Announcements written by John Douglas Waggle and published by . This book was released on 1994 with total page 254 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The German Financial System written by Jan Pieter Krahmen (editor) and published by . This book was released on 2004 with total page 550 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by a team of scholars, predominantly from the Centre for Financial Studies in Frankfurt, this volume provides a descriptive survey of the present state of the German financial system and a new analytical framework to explain its workings.
Download or read book Renaissance Drama by Women Texts and Documents written by S.P. Cerasano and published by Routledge. This book was released on 2006-11-22 with total page 253 pages. Available in PDF, EPUB and Kindle. Book excerpt: Renaissance Drama By Women is a unique volume of plays and documents. For the first time, it demonstrates the wide range of theatrical activity in which women were involved during the Renaissance period. It includes full-length plays, a translated fragment by Queen Elizabeth I, a masque, and a substantial number of historical documents. With full and up-to-date accompanying critical material, this collection of texts is an exciting and invaluable resource for use in both the classroom and research. Special features introduced by the editors include: * introductory material to each play * modernized spellings * extensive notes and annotations * biographical essays on each playwright * a complete bibliography Methodically and authoritatively edited by S.P. Cerasano and Marion Wynne-Davies, Renaissance Drama by Women is a true breakthrough for the study of women's literature and performance.
Download or read book Stock Buyback Motivations and Consequences A Literature Review written by Alvin Chen and published by CFA Institute Research Foundation. This book was released on 2022-02-09 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: Once infrequently used, stock buybacks have become the dominant form of corporate payouts in the new century. Hundreds of billions of dollars flow from public companies to their shareholders via share repurchases every year. This literature review presents the main findings from the academic literature on stock buybacks in the United States and around the world. Where appropriate and possible, it compares and contrasts the insights of researchers to the views of practitioners. There has been much controversy about share repurchases in recent years. On the one hand, proponents of share repurchases say that this payout method provides liquidity and price support, returns excess cash in a flexible way, corrects undervaluation, and conveys information to the market. These aspects of buybacks are also often cited by practitioners as motivations for their share repurchase decisions. Academic research provides evidence that supports this view as well. On the other hand, opponents of buybacks argue that the practice may be used to manipulate executive compensation and mislead investors. While these aspects of share repurchase are rarely mentioned by corporate executives, academic research lends some credence to these concerns. Overall, academic researchers agree that while stock buybacks may be misused, this payout method has clear advantages. Hence, the challenge is to provide the right combination of oversight that allows companies to benefit from those advantages while minimizing potential costs. Finally, the studies surveyed in this review point out that a company’s buyback decision is tightly linked to many of its other policies, such as capital structure, compensation, risk management, and disclosure. Consequently, share repurchase policy discussions should also recognize the implications of the proposed changes for other corporate policies.
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 The Financial Crisis Inquiry Report written by Financial Crisis Inquiry Commission and published by Cosimo, Inc.. This book was released on 2011-05-01 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
Download or read book Guidelines for Public Debt Management Amended written by International Monetary Fund and published by International Monetary Fund. This book was released on 2003-09-12 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: NULL
