haku: @journal_id 33 / yhteensä: 575
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Tekijä: | Isagawa, N. |
Otsikko: | Open-market repurchase announcements and stock price behavior in inefficient markets |
Lehti: | Financial Management
2002 : AUTUMN, VOL. 31:3, p. 5-20 |
Asiasana: | Financial markets Share prices Financial models |
Kieli: | eng |
Tiivistelmä: | The author asks why a firm would choose to buy back its outstanding shares after the stock price goes up in response to an open-market repurchase announcement. He introduces the subject of market inefficiency and establish a signaling equilibrium that does not assume that an announcement of open-market repurchase represents a commitment. Since the firm can earn capital gains by buying its outstanding shares at a bargain price, it has a strong incentive to execute stock repurchases even after it announces repurchase intention. The model predicts positive long-run stock return performance and positive announcement effects following open-market repurchase announcements. |
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