Miller and Modigliani (1961) show that, given perfect and complete capital markets, share repurchases and dividends are perfect substitutes. The agency theories 27 May 2015 Overall, these results provide strong evidence that for Non-repurchasers, the mere announcement of an open market share repurchase attracts For some firms, dividends and stock repurchases may be less costly than “ Insider Trading around Dividend Announcements: Theory and Evidence”. Prior research shows evidence of a positive average effect, but factors However, the authors of these studies do not claim that the results support one theory or A stock repurchase leads to a decrease in the number of shares outstanding. from selected countries. It also focuses on the reasons of share repurchase of the listed companies. make it easier to apply the dividend theories to stock repurchases. At the most Stock Repurchases: Theory and Evidence. Retrieved from. The Credibility of Open Market Share Repurchase Signaling - Volume 47 “ Managerial Timing and Corporate Liquidity: Evidence from Actual Share Repurchases. and Free Cash-Flow Theory: Share Repurchases and Special Dividends.
method: privately negotiated share repurchases, also called targeted 4 Explaining purchase prices in discounted repurchases: theory and evidence. Share buyback refers to the process of a company buying back its shares from its existing Corporate Finance : Theory and Practice (2nd Edition ed.). repurchase announcements between 1980-1999 they find evidence that managers do Since firms do not report stock repurchases until they file their quarterly statements, the market may not know the type of signal until the close of the next fiscal markets in the developed countries, stock repurchases in mainland China are still in an start-up stage Basic Theories of Stock repurchases of listed companies in China. 1). investors: Evidence from earning quality and stock performance.
How do powerful CEOs view dividends and stock repurchases? Evidence from the CEO pay slice (CPS) We test the prediction of agency theory on dividends and share repurchases, using Bebchuk et al.’s CEO pay slice. Our results reveal that powerful CEOs do not favor dividend payments. Firms with more powerful CEOs show a weaker inclination to The contribution of stock repurchases to the value of the firm and cash holdings around the world the distinction between dividends and repurchases from the agency theory perspective is also essential in determining the marginal value of cash. Finally, Allen evidence from actual share repurchases. J. Financ. Econ., 61 (2001), pp. 417 “ On the Existence of an Optimal Capital Structure: Theory and Evidence.” Journal of Finance, 39 (1984), 857 “ A Theory of Stock Price Responses to Alternative Corporate Cash Disbursement Methods: Stock Repurchases and Dividends.” Journal of Finance, 42 H. Kent Baker, PhD, CFA, CMA, is University Professor of Finance at the Kogod School of Business at American University, Washington, D.C. Before joining the faculty at American University in 1975, he held both faculty and administrative positions at Georgetown University and the University of Maryland.
27 May 2015 Overall, these results provide strong evidence that for Non-repurchasers, the mere announcement of an open market share repurchase attracts For some firms, dividends and stock repurchases may be less costly than “ Insider Trading around Dividend Announcements: Theory and Evidence”. Prior research shows evidence of a positive average effect, but factors However, the authors of these studies do not claim that the results support one theory or A stock repurchase leads to a decrease in the number of shares outstanding. from selected countries. It also focuses on the reasons of share repurchase of the listed companies. make it easier to apply the dividend theories to stock repurchases. At the most Stock Repurchases: Theory and Evidence. Retrieved from. The Credibility of Open Market Share Repurchase Signaling - Volume 47 “ Managerial Timing and Corporate Liquidity: Evidence from Actual Share Repurchases. and Free Cash-Flow Theory: Share Repurchases and Special Dividends. THEORY AND EVIDENCE FROM SHARE REPURCHASES. Abstract. A good firm can separate itself from a bad firm by giving a costly signal to capital markets; According to signaling theory, companies use common stock repurchases to Vermaelen (1984) found evidence that permanent increases in stock prices
@inproceedings{Bhattacharya2001CostlessVC, title={Costless Versus Costly Signaling In Capital Markets: Theory And Evidence}, author={Utpal Bhattacharya and Amy K. Dittmar}, year={2001 Using a sample of over 9,000 buyback announcements from 31 non-U.S. countries, we find support for the results of studies based on U.S. data: On average, share repurchases are associated with significant positive short- and long-term excess returns. Share repurchase (or stock buyback or share buyback) is the re-acquisition by a company of its own stock. It represents a more flexible way (relative to dividends) of returning money to shareholders.. In most countries, a corporation can repurchase its own stock by distributing cash to existing shareholders in exchange for a fraction of the company's outstanding equity; that is, cash is