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| Author: | Ho, L-C. J. Liu, C-S. Ramanan, R. |
| Title: | Open-market stock repurchase announcements and revaluation of prior accounting information |
| Journal: | Accounting Review
1997 : JUL, VOL. 73:3, p. 475-487 |
| Index terms: | MARKETS PURCHASING MARKETS ACCOUNTING INFORMATION SYSTEMS |
| Language: | eng |
| Abstract: | This paper finds that the market reaction to the open-market repurchase announcement is associated with the firm's sales growth and accounting profitability in prior periods. The result holds after controlling for two known correlates of the market response, the announced fraction to be repurchased and prior returns. The result is consistent with the market reinterpreting previously released accounting information when interpreting a subsequent repurchase announcement by the company. The association between the market response and prior accounting information is more pronounced for firms smaller in size or which have fewer analysts following them. |
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