Download or read book The Timing of Actual Share Repurchases written by Stefan Obernberger and published by . This book was released on 2014 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Numerous studies document that firms buy back below average market prices. I model two hypotheses explaining the timing of actual share repurchases and test their predictions using a unique data set for the U.S. for the period 2004-2010. The market-timing hypothesis postulates that firms anticipate returns and thus buy back before stock price increases. The contrarian-trading hypothesis proposes that firms buy back more at lower stock prices simply because repurchases are negatively related to realized returns. While contrarian-trading firms have no timing ability ex-ante, their trading behavior generates empirical patterns suggesting ex-post that firms are able to buy back below average market prices. The empirical finding that firms buy back shares below average market prices can be entirely explained by contrarian-trading. Actual share repurchases are not followed by positive abnormal returns.
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 Predicting the Timing of Actual Share Repurchase in Hong Kong written by Ka-fu Wong and published by . This book was released on 2001 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Share Repurchases Market Timing and Abnormal Returns written by Matthew Daniel Gunn and published by . This book was released on 2017 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: My main contributions are thus threefold: I provide systematic, machine extracted data on repurchases, show that small to mid-size firms have positive abnormal returns while large firms do not, and use machine learning techniques to forecast repurchases and show abnormal returns around earning announcement days and 10-Q and 10-K filing dates are positively associated with the unexpected component of repurchases, the share repurchase surprise.
Download or read book Managerial Timing and Corporate Liquidity written by Paul Brockman and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this paper is to investigate the timing of open market share repurchases and its resultant impact on corporate liquidity. We identify the exact implementation dates for over 5,000 equity buybacks on the Stock Exchange of Hong Kong between November 1991 and August 1999. A bootstrapping method is used to distinguish managerial timing ability from a naive accumulation plan. The results show that managers exhibit substantial timing ability. Consistent with the information-asymmetry hypothesis (Barclay and Smith (1988 Journal of Financial Economics 22, 61-82)), we find strong evidence that bid-ask spreads widen and depths narrow during repurchase periods. We further decompose bid-ask spreads and show that the adverse selection component increases substantially when market participants respond to the presence of informed managerial trading. Overall, our market timing, spread and depth, and decomposition results reveal a coherent picture of managerial buyback behavior and its impact on firm liquidity. Our results have significant implications for corporate payout and disclosure policies.
Download or read book Effect of Stock Price Information on Timing of Share Repurchases written by Chee Meng Chong and published by . This book was released on 2019 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: Objective - This study investigates whether private information newly incorporated into stock price enhances performance in timing share repurchases.Methodology/Technique - Cost saving gained in share repurchases is used a proxy for performance of market-timing in share repurchases and firm-specific stock return variation is used to gauge stock price informativeness. A sample of 334 U.S. repurchasing firms are tested using panel data regression.Findings - The paper concludes that managers possess better market timing skill by obtaining more cost saving from their share repurchases when private information is reflected in stock price. Stock price informativeness may be the tool for managers to improve their market timing skill to take advantage of the stock market. Furthermore, firms with smaller size and a higher market-to-book ratios, and firms with higher cash-to-assets ratios are found to achieve more cost saving in buying back their shares indicating that these firms are able to time the market in share repurchasing.Novelty - Despite numerous previous studies focusing solely on using share repurchases announcement for computing cumulative abnormal returns in testing managerial market timing, this study contributes to the literature in several ways: (i) providing evidence relating stock price informativeness and performance of market-timing in share repurchases; (ii) developing a better timing measure constructed using actual repurchasing data; (iii) adopting a cost saving measure as the timing measure instead of cumulative abnormal return.Type of Paper: Empirical.
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 Actual Share Repurchases Timing and Corporate Liquidity written by Edith Ginglinger and published by . This book was released on 2015 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on the impact of open market share repurchases has been hindered by the lack of data available on actual share repurchases in many countries, including the US. Using a previously unused database containing detailed information on 36,848 repurchases made by 352 French firms, we show that corporate share repurchases have a significant adverse effect on liquidity as measured by bid-ask spread or depth. Our results also indicate that share repurchases largely reflect contrarian trading rather than managerial timing ability.
Download or read book Actual Share Repurchases Timing and Liquidity written by Edith Ginglinger and published by . This book was released on 2014 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Research on the impact of open market share repurchases has been hindered by the lack of data available on actual share repurchases in many countries, including the US. Using a previously unused database containing detailed information on 36,848 repurchases made by 352 French firms, we show that corporate share repurchases have a significant adverse effect on liquidity as measured by bid-ask spread or depth. Our results also indicate that share repurchases largely reflect contrarian trading rather than managerial timing ability.
Download or read book Can Managers Time the Market written by Grégoire Bovet and published by . This book was released on 2019 with total page 168 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Two Essays on Stock Repurchase written by Hongsong Neuhauser and published by . This book was released on 2009 with total page 69 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the U.S., stock repurchases, as a major cash distribution mechanism of public companies, have exhibited a rising trend that is insensitive to both the increase and decline of the stock market. In this dissertation, we study firms' actual repurchase activities for the period of 1983 to 2008 using both annual and quarterly financial information, combined with insiders fillings with SEC. Our findings suggest a much profound reason to better elucidate firms' actual stock repurchase activities. We find that executive options (but not employee) play a large and significant role in explaining the firm's actual repurchases. More important, we find a positive and significant relationship between timing of executives' option exercises and their firms' level of actual repurchases during the same period. Our results are robust and not driven by methodologies used in measuring stock repurchases, option grants, and option exercise factors, in variable definitions or classifications of firms, nor by sample time periods. Last but not least, we find that actual share repurchase activity (as opposed to repurchase announcements) is not consistent with other hypotheses for stock repurchases, including: (a) flexible substitution for dividends; (b) correction of undervaluation; and (c) disgorging of free cash flow. This evidence has important implications for the ongoing debate regarding the fairness of executive compensation. Finally, our evidence demonstrates the justification of further regulation on actual stock repurchases for the improving of the transparency and the efficiency of security markets.
Download or read book Share Repurchases Market Timing and the Distribution of Free Cash Flow written by Chao Zhuang and published by . This book was released on 2015 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although market-timing considerations are empirically important, the desire to distribute free cash flow (FCF) has quantitatively much stronger effects on managerial decisions to repurchase stock. Firms with poor market-timing opportunities and high FCF are more than 12 times as likely to buy back shares as firms with good timing opportunities and low FCF. Firms' decisions to buy back shares often tend to be poor in a market-timing sense as they are more likely to experience negative than positive abnormal stock returns after repurchases. Although average post-repurchase abnormal stock returns are positive, this finding is driven by extreme positive rates of return following a modest number of repurchases that are small in dollar magnitude and that account for a small portion of the aggregate dollar value repurchased.
Download or read book Overconfidence and the Timing of Share Repurchases written by Jonathan F. Handy and published by . This book was released on 2015 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the efficiency of open market repurchases across managerial confidence types. We find that moderately confident managers repurchase at relatively lower prices than overconfident managers and at prices that are closer to the quarterly low stock price. Additionally, we analyze bid-ask spreads and show that spreads are relatively lower in quarters when overconfident managers are repurchasing shares. Our results suggest that repurchases by moderately confident managers are informed attempts to time the market, while repurchases by overconfident managers are either ill-informed or made for other reasons.
Download or read book Mergers Acquisitions and Other Restructuring Activities written by Donald DePamphilis and published by Academic Press. This book was released on 2011-08-22 with total page 784 pages. Available in PDF, EPUB and Kindle. Book excerpt: Two strengths distinguish this textbook from others. One is its presentation of subjects in the contexts wherein they occur. The other is its use of current events. Other improvements have shortened and simplified chapters, increased the numbers and types of pedagogical supplements, and expanded the international appeal of examples.
Download or read book Model Rules of Professional Conduct written by American Bar Association. House of Delegates and published by American Bar Association. This book was released on 2007 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Model Rules of Professional Conduct provides an up-to-date resource for information on legal ethics. Federal, state and local courts in all jurisdictions look to the Rules for guidance in solving lawyer malpractice cases, disciplinary actions, disqualification issues, sanctions questions and much more. In this volume, black-letter Rules of Professional Conduct are followed by numbered Comments that explain each Rule's purpose and provide suggestions for its practical application. The Rules will help you identify proper conduct in a variety of given situations, review those instances where discretionary action is possible, and define the nature of the relationship between you and your clients, colleagues and the courts.
Download or read book The Corporate Calendar and the Timing of Share Repurchases and Equity Compensation written by Ingolff Dittmann and published by . This book was released on 2022 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether the CEO uses share repurchases to sell her equity grants at inflated stock prices, a concern regularly voiced in politics and media. We find that the timing of buyback programs and equity compensation, i.e., the granting, vesting, and selling of equity, is largely determined by the corporate calendar through blackout periods and earnings announcement dates. As a consequence, share repurchases and equity compensation are positively correlated. This correlation disappears once we account for the corporate calendar and should thus not be interpreted causally. Our results do not support the conclusion that CEOs systematically misuse share repurchases at the expense of shareholders. To the contrary, equity compensation increases the propensity to launch a buyback program when buying back shares is beneficial for long-term shareholder value.
Download or read book Handbook of Corporate Finance written by David J. Denis and published by Edward Elgar Publishing. This book was released on 2024-02-12 with total page 709 pages. Available in PDF, EPUB and Kindle. Book excerpt: Expertly surveying the realm of corporate finance, this adroitly-crafted Handbook offers a wealth of conceptual analysis and comprehensively outlines recent scholarly research and developments within the field. It not only delves into the theoretical dimensions of corporate finance, but also explores its practical implications, thereby bridging the gap between these distinct strands.
