Open Market Stock Repurchase And Stock Price Behavior PDF Download
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Author | : Nobuyuki Isagawa |
Publisher | : |
Total Pages | : |
Release | : 2001 |
Genre | : |
ISBN | : |
Download Open-Market Stock Repurchase and Stock Price Behavior When Management Values Real Investment Book in PDF, ePub and Kindle
This paper provides a simple explanation of open-market stock repurchases and the stock price behavior surrounding them. There is ex ante asymmetry of information with regard to the private benefits that corporate managers can attain from real investments. In our model, open-market repurchase announcements reveal information about the managers' private benefits when real investment opportunities are unprofitable in terms of firm values. This study differs from previous studies in that we show that announcements of open-market repurchase programs can be believable without the restriction that the announcements are commitments. Empirically, the model simultaneously predicts that a stock price will drop prior to an open-market repurchase announcement and will rise in response to the announcement. These predictions are consistent with stylized facts.
Author | : Nobuyuki Isagawa |
Publisher | : |
Total Pages | : 44 |
Release | : 2000 |
Genre | : |
ISBN | : |
Download Open Market Stock Repurchase and Stock Price Behavior Book in PDF, ePub and Kindle
Author | : Nobuyuki Isagawa |
Publisher | : |
Total Pages | : |
Release | : 2009 |
Genre | : |
ISBN | : |
Download Open-Market Repurchase Announcements, Actual Repurchases, and Stock Price Behavior in Inefficient Markets Book in PDF, ePub and Kindle
I ask why a firm would choose to buy back its outstanding shares after the stock price goes up in response to an open-market repurchase announcement. I introduce the subject of market inefficiency and establish a signaling equilibrium that does not assume that an announcement of open-market repurchase represents a commitment. Since the firm can earn capital gains by buying its outstanding shares at a bargain price, it has a strong incentive to execute stock repurchases even after it announces repurchase intention. Empirically, my model predicts positive long-run stock return performance and positive announcement effects following open-market repurchase announcements.
Author | : Tony Altobelli |
Publisher | : |
Total Pages | : |
Release | : 1998 |
Genre | : |
ISBN | : |
Download An Analysis of Repurchase Behavior in Open Market Stock Buyback Programs Book in PDF, ePub and Kindle
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.
Author | : Larry York Dann |
Publisher | : |
Total Pages | : 366 |
Release | : 1980 |
Genre | : Stocks |
ISBN | : |
Download The Effect of Common Stock Repurchase on Securityholder Returns Book in PDF, ePub and Kindle
Author | : Weiping Liu |
Publisher | : |
Total Pages | : 29 |
Release | : 2006 |
Genre | : |
ISBN | : |
Download Open-Market Stock Repurchase Behavior Under Asymmetric Information, Theory and Empirical Evidence Book in PDF, ePub and Kindle
Stock repurchase, one of the most important ways to distribute earnings to shareholders, is often interpreted as a signal of underpricing of the firm's stocks. However, two anomalies can be observed in the stock repurchase behavior: (1) Prices of repurchased stocks often do not increase as expected after stock repurchase announcement. (2) The actual number of shares repurchased is frequently smaller relative to firms' announced intentions. In this paper, a theory of explaining these anomaly behaviors is developed and empirically tested. The theory posits that stock repurchase announcement is not a guarantee of stock underpricing, the price movement of repurchased stocks and the amount of stocks repurchased are the results of interaction between the management of the firm and the market investors. The empirical evidence supports the theory.
Author | : Theo Vermaelen |
Publisher | : Now Publishers Inc |
Total Pages | : 117 |
Release | : 2005 |
Genre | : Business & Economics |
ISBN | : 1933019166 |
Download Share Repurchases Book in PDF, ePub and Kindle
This survey derives some of the key results on the taxation of international investment in variants of one model of multinational investment.
Author | : |
Publisher | : |
Total Pages | : 83 |
Release | : 2007 |
Genre | : Corporations |
ISBN | : 9781846632563 |
Download Payout Policy Book in PDF, ePub and Kindle
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.
Author | : Barbara Black |
Publisher | : Clark Boardman Callaghan |
Total Pages | : 906 |
Release | : 1990 |
Genre | : Dividends |
ISBN | : |
Download Corporate Dividends and Stock Repurchases Book in PDF, ePub and Kindle
Author | : Harry DeAngelo |
Publisher | : Now Publishers Inc |
Total Pages | : 215 |
Release | : 2009 |
Genre | : Corporations |
ISBN | : 1601982046 |
Download Corporate Payout Policy Book in PDF, ePub and Kindle
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.