Underreaction to open market share repurchases,
نویسندگان
چکیده
منابع مشابه
Takeover vulnerability and the credibility of signaling: The case of open-market share repurchases
There is debate in the literature focuses on whether open market repurchases can be taken as a signal of stock undervaluation. This research argues that takeover pressures before a repurchase announcement can be a credible signal of undervaluation. The empirical results indicate that repurchasing firms with a higher probability of takeover experience greater announcement effects, improvements i...
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Managers conduct open market repurchases ("OMRs") for many different reasons, including to distribute excess cash. However, the most widely discussed explanation for OMRs is the "signaling theory": that managers announce OMRs to signal that the stock is underpriced. The first purpose of this paper is to show that the signaling theory is theoretically problematic—in part because it assumes manag...
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We analyze the decision to announce an open market share repurchase and the share price reaction to the announcement. We use a conditional estimation approach which takes into account that the repurchase decision is made rationally and that, consequently, there is a potential selection bias. This approach requires a ‘non-event sample’ of firms that could reasonably be expected to announce a rep...
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This paper examines open market share repurchases in Canada (called Normal Course Issuer Bids—NCIB). Similar to announcements of U.S. open market share repurchases, announcements of Canadian NCIBs are accompanied by a positive stock price reaction. If NCIBs signal information, then it is not in the same manner as U.S. repurchases. Canadian firms usually announce the legal maximum proportion of ...
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This paper focuses on the agency problem derived from the conict of interest between employees and shareholders. I show that if employees are compensated with restricted stock or stock options, shareholders may engage in opportunistic share repurchases. Equityholders have an incentive to buy back stock after employment contracts have been signed because repurchases increase compensation sensit...
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ژورنال
عنوان ژورنال: Revista Contabilidade & Finanças
سال: 2019
ISSN: 1808-057X,1519-7077
DOI: 10.1590/1808-057x201806230