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| Author: | Brockman, P. Khurana, I.K. Martin, X. |
| Title: | Voluntary disclosures around share repurchases |
| Journal: | Journal of Financial Economics
2008 : JUL, VOL. 89:1, p. 175-191 |
| Index terms: | management information disclosure forecasting shares |
| Freeterms: | repurchasing |
| Language: | eng |
| Abstract: | During the one month period prior to repurchasing shares, the frequency and magnitude (henceforth as: f-and-m.) of bad news announcements (as: anns.) is increased by managers. Also, the f-and-m. of good news anns. during the 1-month period following the repurchases (here as: reps.) is increased. These results are consistent with Barclay and Smith's assumption that share reps., unlike dividends, create incentives for managers to manipulate information flows ("Corporate payout policy: Cash dividends versus open-market repurchases" in Journal of Financial Economics, 1988, 22, p. 61-82). In addition, it is shown that managers provide downward-biased earnings forecasts before reps. and that managers' propensity to change information flows prior to share reps. increases with their ownership interest in the firm. |
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