search query: @indexterm Tender offers / total: 102
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| Author: | Nohel, T. Tarhan, V. |
| Title: | Share repurchases and firm performance: new evidence on the agency costs of free cash flow. |
| Journal: | Journal of Financial Economics
1998 : AUG, VOL. 49:2, p. 187-222 |
| Index terms: | Stock repurchases Cash flow Capital structure of companies Tender offers |
| Language: | eng |
| Abstract: | The authors examine tender offer share repurchases to differentiate between the information signaling and free cash flow hypothesis. They also examine announcement retuns; their primary emphasis is on operating performance changes surrounding repurchases. They argue that the information contained in changes in operating performance, and its determinants, enables them to differentiate between the two hypotheses. Their primary finding is that operating performance following repurchases improves only in low-growth firms, and that these gains are generated by more efficient utilization of assets, and asset sales, rather than improved growth opportunities. They conclude that the positive investor reaction to repurchases is best explained by the free cash flow hypothesis. |
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