The Information Content of Common Stock Repurchases: an Empirical Study

Details

Serval ID
serval:BIB_6FFBC923E3E9
Type
Article: article from journal or magazin.
Collection
Publications
Title
The Information Content of Common Stock Repurchases: an Empirical Study
Journal
British Journal of Management
Author(s)
Oyon D., Constantinos C, Markides C., Ittner C.
ISSN
1045-3172
Publication state
Published
Issued date
12/1994
Peer-reviewed
Oui
Volume
5
Number
Issue Supplement
Pages
65-75
Language
english
Abstract
Share repurchase announcements are known to be associated with significant positive abnormal stock returns. Past studies have argued that the main explanation of this value creation is that share repurchases signal new (and favourable) information about the repurchasing firms' future cash flows. This paper examines this hypothesis and provides evidence on the nature of the information revealed by share repurchases. Using a sample of 41 repurchase announcements from the USA, we show that the new information signalled to the stock market through share repurchasing is not only about changes in the level of future cash flows but also about changes in the riskiness of these cash flows.
Create date
26/05/2010 22:27
Last modification date
20/08/2019 14:28
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