Actual share acquisitions in open-market repurchase programs

STEPHENS and MICHAEL S. In a sample of programs from tofirms on average acquire 74 to 82 percent of the shares announced as repurchase targets within three years of the repurchase announcement. We find that share repurchases are negatively related to prior stock price performance, suggesting that firms increase their purchasing depending on its degree of perceived undervaluation. In addition, repurchases are positively related to levels of cash flow, which is consistent with liquidity arguments.

Open-market repurchase programs have become increasingly popular relative to Dutch auction or fixed-price tender offer repurchases and represent approximately 90 percent of the dollar value of all announced repurchase programs. For example, both The Wall Street Journal March 7, and Fortune September 4, have argued that actual reacquisitions are small relative to firms announced intentions and suggest that announcement of an open-market repurchase program is merely an attempt by management to raise the firm s stock price at little or no cost.

This research was begun as part of the first author s dissertation submitted in partial fulfillment of the requirements for a Ph. We then document the magnitude of actual open-market share repurchases. We argue that the popularity of open-market repurchase programs is less likely due to managers attempting to manipulate their firm s stock price than to the inherent flexibility of these programs with respect to the timing and quantity of actual purchases. It also appears that firms generally repurchase either substantially all or almost none of the shares announced at the time of program initiation.

Three years after the announcement, more than one half 57 percent of the firms bought back at least the number of shares targeted in the original repurchase announcement, 10 percent of the firms bought less than 5 percent of the number of shares announced, and a substantial number of firms reacquired no shares at all.

After completing the initially announced repurchase program many firms continue to repurchase shares 30 percent of the firms in our sample repurchased twice as many shares as originally announced. We find that repurchases in one quarter are negatively related to the performance of the firm s stock in the prior quarter, as well as to the cumulative return on the firm s stock since the announcement of the program. This finding provides additional support for the hypothesis that managers repurchase shares when they believe their firm is undervalued DannVermaelenComment and JarrellIkenberry et al.

Our estimates indicate that quarterly repurchases are positively related to both the expected and surprise components of the firm s quarterly cash flows, suggesting that managers adjust their stock repurchases for unexpected changes in the firm s cash position. Such adjustments would not be possible if the manager were required either to precommit to a specific quantity, or dollar value, of share repurchases or to precommit to the timing of these repurchases.

The remainder of this paper is organized as follows. We provide a brief discussion of the related literature in Section I. In Section II, we introduce potential reasons why the flexibility implicit in open-market share repur- 2 Although firms are not required to announce share repurchases, the announcement of the firm s intent to repurchase shares on the open market or through privately negotiated transactions is one of the safe harbor provisions under the stock price manipulation provisions of the Securities and Exchange Act.

Share repurchases are measured for the three years following the program s announcement; our estimate of share repurchases is constructed to measure only the extent to which firms complete their original repurchase program. If the shares repurchased after completing the initially announced program are also included in our repurchase measure, then the average firm repurchases percent of the announced number of shares and the median firm repurchases percent.

In Section III, we describe the sample, discuss the construction of alternative measures of actual openmarket share repurchases, and present univariate statistics for the alternative share repurchase measures.

We consider the abnormal returns at the announcement of the repurchase plans and their relation to subsequent buyback activity by the firm in Section IV. We test the flexibility arguments directly by estimating equations that predict share repurchases as a function of lagged stock returns and the firm s cash flows; these results are reported in Section V, followed by a brief conclusion in Section VI.

Literature Review There are three primary methods a firm may use to repurchase its own equity: DannVermaelenAsquith and Mullinsand Comment and Jarrell have identified significant, positive abnormal returns associated with the announcement of each of the three types of repurchase arrangements. This stock-price increase around the announcement of share repurchases is usually interpreted as support for the asymmetric information, or signalling hypothesis, which states that firms buy back their own equity when their managers have private information that the firm s stock is underpriced.

A stock repurchase announcement signals management s information about their company s undervaluation, so the stock price rises when this information is revealed. Similarly, share repurchases may result in the redistribution of wealth among investors. Brennan and Thakor derive an analytical model suggesting that share repurchases result in a redistribution of wealth from small, uninformed shareholders to large, informed shareholders. Because information gathering is costly, only large shareholders will profit from becoming informed; uninformed shareholders will tend to sell when the market price is too low and remain when the market price is too high.

Comment and Jarrell compare the three most common ways of repurchasing securities: They find that tender offers tend to be for the largest number of shares and to have the largest stock-price reaction, and openmarket repurchase plans tend to be the smallest, in terms of both the number of shares targeted and the stock-price reaction. Comment and Jarrell interpret their results as suggesting that fixed-price tender offers generally signal the most information to investors and open-market repurchases the least.

There also appears to be evidence that firms time their repurchase announcements to take advantage of periods when their equity is more undervalued by the market. Comment and Jarrell find that firms tend to announce open-market repurchase plans following a decline in their share price, when their stock is more likely to be undervalued. This abnormal performance strongly suggests that these firms were in fact undervalued at the time of the announcement of the repurchase program.

Ikenberry and Vermaelen propose an alternative interpretation, treating open-market repurchases as exchange options that give the firm the ability to exchange the market value of the firm for its true value at management s discretion.

The stock-price increase around the announcement comes in part from the option to buy back shares which is created when an openmarket repurchase plan is announced. Factors Affecting the Timing of Share Repurchases A. The Asymmetric Information or Undervalued Equity Hypothesis The asymmetric information or undervalued equity hypothesis suggests that the increase in share price results from the information revealed by the announcement; Asquith and Mullins call the announcement of a repurchase program a news bulletin that management is convinced the firm is undervalued.

This explanation of share repurchases suggests that managers time their share repurchases for when they believe their firm s stock is most undervalued. There is substantial evidence that asymmetric information is an important determinant of the initiation of repurchase programs for initiations are: An open-market repurchase program allows managers the flexibility to purchase less stock than planned if the stock becomes more expensive or more stock if it remains less expensive.

Thus, the asymmetric information hypothesis predicts that repurchases will increase following poor stock price performance and decrease following good stock price performance.

Cash Flow Considerations A clear prediction of any theory of payout policy is that the quantity of payouts will vary positively with the firm s cash flow. Although managers of firms announcing share repurchase programs are likely to expect cash flows high enough to cover some future payouts, there is uncertainty regarding the future cash flow streams and cross-sectional variation among the repurchasing firms cash flow positions.

There are large reputational penalties for reducing dividends Bajaj and VijhKaplan and ReishusDenis, Denis, and Sarinbut this same phenomenon has not been documented for failure to complete a previously announced open-market repurchase program. Thus, we might expect firms to utilize their ability to vary actual repurchases as a way of adjusting payouts without attracting atten.

Sample Construction and Univariate Analysis of Repurchases A. Sample Selection To examine actual reacquisition of shares in open-market repurchase programs, we construct a sample of open-market repurchase program announcements designed to facilitate measurement of stock purchases by the firm subsequent to the announcement of the repurchase program.

The initial sample consists of all open-market repurchase programs announced from to in The Wall Street Journal Index, excluding the announcements made during the fourth quarter of We exclude repurchase announcements made during the fourth quarter of for two reasons. First, most of the existing literature see Bartov or Ikenberry et al. Second, the sheer number of repurchase programs announced during this period suggests that they are different in some important respect from more typical programs and including them would lead to time-clustering problems because market-wide shocks affect all these observations in the same way.

We do not consider repurchase announcements subsequent to because we wish to calculate the number of shares repurchased by these firms for three years following the openmarket repurchase program announcement. We eliminate a number of observations from the sample because of data constraints. Forty-eight repurchase programs are excluded because the number of shares involved in the repurchase program is unavailable.

One hundred twenty-three firms delist in the three years subsequent to the announcement and 92 announcements are excluded due to a prior repurchase program within three years of the current program, precluding our ability to measure repurchases in these programs.

When only the dollar amount of the repurchase program is given, the share price on the announcement date is used to calculate the actual number of shares intended to be repurchased. Of these cases, firms do not have all of the required data available on Compustat for 12 quarters subsequent to the announcement, yielding a primary sample of observations. Additionally, one of our measures of share repurchases relies on the Purchases of Common and Preferred Stock from Compustat quarterly cash flow data.

Actual Share Reacquisitions in Open-Market Repurchase Programs - PDF

Because this data item is not available prior toour sample is further reduced to observations when this variable is required. Table I partitions the sample by year. The average announced size of an open-market repurchase program is approximately 7 percent of the firm s total shares outstanding on the date of announcement; the median is approximately 5 percent of the firm s shares outstanding. The number of openmarket repurchase programs per year is roughly constant over the sample period; however, there is a large spike in repurchase announcements in when 68 announcements are included in the sample.

Additionally, the programs are generally increasing in size during the sample period. Measuring Reacquired Shares Our analysis relies on accurate measurement of the number of shares actually acquired by the firms.

However, share repurchases can be neither observed at the time the transaction occurs nor directly measured afterward. We examine four alternative proxies for the number of shares repurchased to mitigate the effect of potential measurement error. The measures we use as possible proxies for the actual number of shares repurchased by firms subsequent to the announcement of an open-market repurchase program are: We scale each measure by either the total number of shares outstanding at the time of announcement or the number of shares announced in the repurchase program; the results are similar using either scaling factor.

Each of these measures, as well as the differences in their construction and biases, is discussed below. CRSP Shares Outstanding The primary measure we use to proxy for share repurchases is the monthly decrease in shares outstanding reported by CRSP, adjusted for nonrepurchase activity affecting shares outstanding, such as stock splits. We do not offset monthly decreases with increases in the other months in the same quarter, because it is possible, even when a firm is actively repurchasing.

The mean and median numbers of shares targeted for repurchase at the time of the program s announcement are expressed as a percentage of shares outstanding; and the actual repurchases are expressed as a percentage of the number of shares targeted at the time of the announcement.

Actual share repurchases are measured as the cumulative monthly decreases in shares outstanding per CRSP. The share repurchases variables are truncated at both 0 and 1 by construction. Increases in shares outstanding or share distributions are not used to offset share buybacks truncating the variable at 0.

Repurchases above percent of the target level of repurchases are defined to be zero to mitigate the effects of secondary announcements or repurchase program expansions. To the extent that the firm both repurchases shares and distributes shares within the same month, this proxy for repurchased shares understates the true quantity of repurchases. Compustat Shares Outstanding A similar measure can be constructed using the number of shares outstanding reported on Compustat.

Quarterly decreases in the number of Compustat shares outstanding produces a measure of shares repurchased that should be nearly identical to the CRSP measure. However, use of the longer quarterly time period versus the monthly time period available on CRSP increases the probability of share repurchases and distributions crossing within the same time period, thereby understating actual share repurchases more severely than the CRSP-based measure.

Purchases of Common and Preferred Stock from Compustat Cash Flow Data The net dollars spent on repurchases or retirements of the firm s own securities is reported on the Statement of Cash Flows or Flow of Funds Statement and is provided on the quarterly Compustat tapes. There are, however, two issues that must be addressed when using this variable to construct a measure of the number of repurchased shares.

First, we do not know the price of the shares repurchased. We compute the number of shares repurchased under one of two alternative assumptions: The lowest price assumption is based on the notion that managers use their informational advantages over other investors; however, the assumption overstates the number of shares repurchased as it is unlikely that managers were able to execute all their purchases at the minimum price.

A second problem with this measure of share repurchases is that the repurchase figure from Compustat is an aggregate of all security repurchases and retirements during the quarter.

This aggregation may result in serious 6 The low price assumption implicitly requires that managers are able to recognize contemporaneously the lowest price of the firm s stock during the quarter and are able to execute all trades at this price. The trade restrictions imposed by the antimanipulation safe harbor provisions essentially preclude the execution of all trades at this price, even if management is able to recognize this as the lowest price of the quarter.

Additionally, the low price is likely to be a bid price, which further reduces the likelihood that all trades take place at precisely this price. Thus, the combination of these two effects implies that the flow of funds measure, especially with the lowest price assumption, overestimates actual repurchases of common stock.

Compustat Changes in Treasury Stock The final measure is computed from the quarterly change in the dollar value of Treasury stock reported by Compustat. This measure suffers from both of the previously discussed problems of not knowing the repurchase price, as well as repurchases and distributions overlapping in the same period.

We again compute two estimates of shares repurchased based on changes in the dollar value of Treasury stock divided by either the average monthly closing price or the low price during the quarter. The measure based on changes in the dollar value of Treasury stock has the most potential sources of bias and is likely to have the lowest correlation with the firm s actual share repurchases of any of the repurchase measures.

Comparison of the Alternative Repurchase Proxies Table II presents statistics on the timing and quantity of repurchases by quarter subsequent to the announcement of the programs. Panel A presents estimates of the extent to which firms complete their repurchase programs as originally announced; Panel B documents total repurchases, including repurchases in excess of the quantity specified in the initial announcement. Several results are apparent from Table II. First, the observed differences in the repurchase levels are consistent with our expectations about the problems with inferring the number of shares repurchased from a dollar figure that potentially includes repurchases of preferred stock and that assumes a low price for common stock repurchases.

The measures based on the dollar value of share repurchases are likely overstated and imply noticeably larger repurchase levels than do the measures based on changes in shares outstanding. The truncation imposed in the construction of the repurchase measures presented in Panel A results in the dissipation of these differences over 7 This aggregation includes: Treasury stock is reported by the firm as a contra account or debit to owner s equity for financial reporting purposes.

The increase in Treasury stock value associated with an equity repurchase is included by Compustat in the aggregate figure, Purchases of Common and Preferred Stock Compustat quarterly data item If the firm holds the shares as Treasury stock or retires the shares, the value included in this aggregation is an accurate reflection of the cost of acquiring the shares. However, if the shares are subsequently distributed or reissued, this aggregation will also capture any change in the market value of the shares since the time they were repurchased.

We thank Doug Malcom at Compustat for his invaluable assistance with this problem. Panel A presents cumulative repurchases truncated at both 0 and percent. Quarterly repurchases are defined to be zero once cumulative repurchases reach percent of the target shares announced at the time of initiation of the open-market repurchase program. Panel B provides the mean cumulative quarterly share repurchases, where repurchases are only truncated at 0; this repurchase measure allows for firms to repurchase more than announced at the plan s initiation.

These data are not truncated at percent of the target and likely overstate repurchases attributable to this announcement because no adjustment is made to mitigate for program expansions or subsequent repurchase programs. Quarterly and cumulative repurchases are expressed as a percentage of shares announced at the time of program initiation. Panel C provides the percentage of firms in the sample that have repurchased at least the specified percentage of shares announced; Panel D provides the percentage of firms in the sample that have not repurchased the specified percentage of shares.

In Panels C and D, the measure of repurchased shares is the cumulative month-to-month decreases in shares outstanding from CRSP. Cumulative Quarterly Repurchases Cumulative Repurchases Truncated at Percent CRSP decreases in shares outstanding Compustat decreases in shares outstanding Dollars spent on repurchases 0 average price Dollars spent on repurchases 0 low price Increases in the dollar value of Treasury stock questrade fx rate price Increases in the dollar value of Treasury stock 0 low price Panel B: Cumulative Quarterly Repurchases Not Truncated CRSP decreases in shares outstanding Compustat decreases in shares outstanding Dollars spent on repurchases 0 average price Dollars spent on repurchases 0 low price Increases in the dollar value of Treasury stock average price Increases in the dollar value of Treasury stock 0 low price Panel C: Percentage of Firms Repurchasing More than percent of announced shares percent of announced shares percent of announced shares Panel D: Percentage of Firms Repurchasing Less than 20 percent of announced shares percent of announced shares percent of announced shares Reacquisitions in Open-Market Repurchase Programs However, these differences persist or even grow through time when the measures are not truncated Panel B.

The differences observed between the cumulative repurchases as measured by the truncated data Panel A versus repurchases as measured by the data without truncation Panel B suggest either that repurchases are often not a one-time event and represent an ongoing payout strategy or that initial limits from one-time programs could simply be exceeded. In either case, firms do so rather quickly many firms exceed initial limits within the first two quarters of the program.

The truncated values from Panel A provide estimates of what fraction of the shares targeted in a given plan are subsequently repurchased.

The measures based on the dollars spent repurchasing the firm s securities, which are likely to be overestimates, show that approximately 82 percent of the original target shares are repurchased in the three years following the announcement of the program.

The CRSP-based measure, which underestimates repurchases, shows that about 74 percent of the original target shares are repurchased. We therefore can bound expected actual repurchases during the three years following the announcement of the program at between 74 percent and 82 percent of the shares originally announced as the repurchase target.

We also suspect that the Compustat measure based on forex online reality trading tutorial pdf in shares underestimates repurchases by more than the CRSP-based measure because increases in shares outstanding tend to offset decreases within a quarter more than when cumulated monthly.

The data are consistent with this view. The Compustat shares-outstanding measure is generally lower than the analogous CRSP measure. The distribution of cumulative share repurchases, including those shares repurchased after completion of the initial program, is described in Panels C and D.

Although a large portion of the firms purchase at least their announced repurchase targets, there are still a significant number of firms that repurchase very little. More than one-half of the firms complete their announced programs and nearly one-third repurchase twice as many shares as they originally announced, but one-tenth of the firms repurchase less than 5 percent of their announced intentions.

Abnormal Returns and the Announcement of Repurchase Programs We obtain confirmation that our repurchase measures are, in fact, related to actual repurchases by modifying an equation originally estimated by Com- 8 One exception is the announcement quarter.

In this quarter, the CRSP measure uses the change in shares outstanding from the date of the announcement, whereas the Compustat forex or win at binary options trading uses the change in shares outstanding over the entire quarter and is thus likely to overstate repurchases during this one quarter.

Comment and Jarrell and Ikenberry and Vermaelen find that announcement period returns are positively related to the fraction of shares stated in the original announcement of the repurchase program, presumably because a larger target signals better information about the company.

If investors have information about what fraction of the announced target they anticipate will actually be repurchased, we would expect them to incorporate this information into their behavior.

Thus, to the extent that investors can forecast the firm s future share repurchases, the announcement period abnormal returns should be related to actual share lump sum investment options india. Calculating Abnormal Returns We rely on standard event-study procedures to calculate the abnormal returns on the announcement of an open-market repurchase program.

The Relation between Abnormal Returns and Subsequent Repurchases The signalling explanation of repurchases predicts that the event-day returns on announcement of a program should be related to the information contained in the announcement. Comment and Jarrell find that larger announced repurchase targets are associated with higher abnormal eventday returns, suggesting that the size of the target proxies for the quality of management s information.

Actual share acquisitions in open-market repurchase programs find some corroboration of this result in Model 1 of Table III, which contains a regression of the three-day abnormal returns on the fraction of shares the firm originally announces as a repurchase target, as well as the excess return for days 40 to 6 prior to the announcement. The coefficient on the repurchase target 0. One might expect that there are factors related to the market s evaluation of the information content of the repurchase announcement that affect ac- 9 We use a three-day event window starting the day prior to the announcement and ending on the day subsequent.

Both abnormal returns and cumulative abnormal returns are calculated for each tourist rates euro pound exchange in the event functions of forex market ppt. The abnormal return on any given day is the market model residual, which is the difference between the stock s actual return and the predicted return based on the market model parameter estimates and the market return for that day.

The cumulative abnormal returns are the geometric cumulation of the abnormal returns. The parameters of the market model are estimated over a day period beginning days prior to the announcement and ending 65 days prior to the announcement, the CRSP equally weighted index is used as the proxy for market returns.

Because many firms in the sample are relatively small, Scholes Williams betas are utilized to adjust for any bias that may result from nonsynchronous trading. Event studies using standard market model OLS betas and abnormal returns defined as the excess firm returns over the CRSP equally weighted index produce both qualitatively and quantitatively similar results. The dependent variable is the cumulative excess returns from the day prior to announcement through the day after choice trade stock brokers. The announcement period abnormal returns are the three-day geometric cumulation of the event study market model residuals.

We use a three-day event window starting the day prior to the announcement and ending on the day subsequent. The parameters of the market model are estimated over a day period beginning days prior to the announcement and ending 65 days prior to the announcement; the CRSP equally weighted index is used as the proxy for market returns.

An event study using standard market model OLS betas produces both qualitatively and quantitatively similar results. Actual share repurchases are quarterly share repurchases cumulated over the two years following the repurchase plan announcement results are quantitatively and qualitatively similar for cumulative repurchases over the first year and over the entire three years.

The cumulative excess returns are the individual firm s returns from day 40 through day 6 relative to the announcement date less the return on the CRSP equally weighted market index over the same period. The coefficients are estimated using ordinary least squares. Model 1 Model 2 Model 3 Model 4 Constant For example, some firms might announce repurchase plans, but have expected cash flows too low to complete the programs; in this case we would observe a crosssectional relation between announcement abnormal returns and subsequent repurchases.

We include our measures of actual repurchases for the two years subsequent to the announcement of the program in Models 2, 3, and 4 of Table III to examine this hypothesis. The coefficients on each of the measures are positive and significantly different from zero at conventional levels. In addition, the coefficient on the repurchase target becomes small and insignificantly different from zero, indicating indicators used in the binary options chart its relation with the event-day abnormal returns is due only to the correlation between announced size and the market s expectations of the firm s actual share repurchases.

First, it suggests that our measures of repurchased shares are at least somewhat accurate, since noise in our measure of repurchased shares will lower the coefficient on actual share repurchases. Secondly, it suggests that the market has some ability to forecast actual repurchases because inaccurate market forecasts should decrease the informativeness of actual share repurchases.

Apparently the market can at least partially see through attempts at such manipulation. Multivariate Analysis of the Factors that Affect the Repurchase Decision A. Econometric Specification We next estimate a model that predicts the factors affecting a firm s decision to repurchase shares. Our measures of actual purchases are available on a quarterly basis; we therefore use quarterly repurchases by a given firm as our dependent variable.

In particular, our dependent variable money maker crossword each of the cross-sectional models is the firm s quarterly share repurchases, scaled by either the number of shares targeted for repurchase or the number of shares outstanding at the time of the repurchase announcement.

We per- 10 We have also estimated these equations using cumulative repurchases for one and how to invest in share market wiki years subsequent to the announcement with similar results.

If, for example, there is a strongly positive reaction to the announcement, underpricing will be reduced, lowering options trade net debit firm s demand for reacquiring securities.

A source of the residual uncertainty in the market s runescape how to make money p2p of future repurchases is the fact that a number of factors determining subsequent repurchases such as future underpricing and future shocks to the firm s cash flow are not known at the time of the repurchase announcement.

In each case, we do not allow share repurchases to be negative even if the firm issued shares during the quarter.

Share repurchase - Wikipedia

Our choice of explanatory variables is guided by the prior discussion. Because of the asymmetric information arguments, we include lagged returns, both during the quarter prior to the quarter in question and cumulated since the repurchase announcement. Asymmetric information arguments suggest a negative coefficient on this variable, because positive returns are likely to bring an undervalued security closer to its fundamental eurusd analysis forexpros, but negative returns are likely to increase any undervaluation.

Siemens stock exchange listing include a cash flow measure because of the arguments suggesting that firms will vary their repurchases depending on their cash flow situation.

We break cash flows into expected and unexpected components, assuming a seasonal random walk model of earnings. Using this specification, we set expected cash flow equal to cash flow lagged four quarters, and we set unexpected cash flow equal to the change in cash flow over these four quarters. The resulting equation we estimate is: Repurchases in a quarter a b 1 Prior returns b 2 Expected cash flows b 3 Unexpected cash flows b 4 Previous repurchases e.

The Prior returns variable is either the return for the quarter preceding the one in question or the cumulative return from the announcement of the repurchase program until the beginning of the quarter or both in some specifications.

The Previous repurchases variable is the percentage of announced target shares repurchased in the prior quarter, supplemented in some specifications by the cumulative percentage of announced shares repurchased since the announcement of the repurchase program. Where 13 Cash flow is measured as income before extraordinary items Compustat quarterly data item 25 plus depreciation expense Compustat quarterly data forex trading halal or haram 5 standardized by the firm s total assets Compustat quarterly data item We also estimate cash flow expectations from the more sophisticated models of Foster and Brown and Rozeffwith very similar results.

Because repurchase activity is known to decrease with time elapsed since the repurchase program was initiated Table IIwe control for this effect explicitly. We also control for calendar years to account for potential macroeconomic effects on repurchase activity. All equations exclude the quarter of the initial announcement because we require returns subsequent to the announcement but prior to the quarter in question. Multivariate Results We present estimates of equation 1 in Table IV.

The firm s current quarter share repurchases appear to be negatively related to the firm s previous unadjusted stock returns. In each of the models 4 hour macd trading strategy coefficient on previous quarter stock returns is negative and significantly different from zero at how to get more cash in ffsng inference levels.

Current quarter repurchases also appear to be negatively related to both the cumulative returns on the firm s stock from the time of announcement through the quarter in question and the current quarter stock return; the coefficients on these variables are generally negative and often significant, although the relation is not nearly as strong as that observed with prior quarter returns.

The negative relation between current share repurchases and prior stock returns is consistent with the predictions of the asymmetric information hypothesis, since undervaluation is likely to binary option auto trader download on gold greater following poor performance.

In addition, the coefficients are large enough to be economically meaningful. Model 1 in Table IV implies that predicted repurchases in the third quarter subsequent to the announcement of a program changes from 7.

This drop of 1. The coefficients actual share acquisitions in open-market repurchase programs both expected and unexpected cash flows are positive and significantly different from zero. This result suggests that a firm s ability to pay affects the firm s decision to repurchase stock.

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The Role of Institutional Investors in Open-Market Share Repurchase Programs Thomas J. Chemmanur Yingzhen Li February 15, Professor of Finance, Fulton HallCarroll School of Management, Boston. American Journal of Economics and Business Administration 2 3: A Test of Technical Analysis Paul Abbondante College of.

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What is Dividend Premium?

Laura Yue Liu Assistant Professor of Finance College of Business and Economics P. Box California State University, Fullerton Fullerton, CA yueliu fullerton. Personal Dividend and Capital Gains Taxes: AFM Fall Solution Instructions: All other questions must be answered in the space provided on the examination. Can managers time the market?

Evidence using repurchase price data Amy Dittmar University of Michigan Laura Field Pennsylvania State University Little is known about the prices firms pay for repurchases. CHAPTER 13 CONCEPT REVIEW QUESTIONS 1. What policies and payments comprise a firm s dividend policy? Why is determining dividend policy more difficult today than in decades past? A firm s dividend policy. We find that the change. WHY DO FIRMS BUYBACK THEIR SHARES?

FIRMS Dennis Oswald and Steven Young First version: August This version: November London Business School. Online Appendix for On the determinants of pairs trading profitability October Table 1 gives an overview of selected data sets used in the study. The appendix then shows that the future earnings surprises. Dividend Policy Lakehead University Winter Types of Dividend Dividends are usually paid in cash, and this four times a year.

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Evidence from the Indian Stock Market Market Reaction to Stock Splits in Large and Liquid Stocks: Evidence from the Indian Stock Market Nehal Joshipura Abstract This study investigates market reaction to stock splits using the standard event More information.

Actual Share Reacquisitions in Open-Market Repurchase Programs - Stephens - - The Journal of Finance - Wiley Online Library

Institutional Trading, Brokerage Commissions, and Information Production around Stock Splits Institutional Trading, Brokerage Commissions, and Information Production around Stock Splits Thomas J. Optimal Debt-to-Equity Ratios and Stock Returns Utah State University DigitalCommons USU All Graduate Plan B and other Reports Graduate Studies Optimal Debt-to-Equity Ratios and Stock Returns Courtney D.

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Who Blinks in Volatile Markets, Individuals or Institutions? Kent State University Graduate School of Management More information. Solutions to Problems Solutions to Problems P Direct evidence on a corporation s motivations for leasing and consequences of leasing The Quarterly Review of Economics and Finance 41 33 47 Leasing versus purchasing: Ezzell, Professor More information. Sources of Shareholders Equity. Chapter 19 Dividends and Other Payouts University of Science and Technology Beijing Dongling School of Economics and management Chapter 19 Dividends and Other Payouts Jan.

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