![]() ![]() Firms are more likely to repurchase stock when the repurchase premium is high and the difference between the repurchase and dividend premium is positive. The fraction of dividend payers that repurchase stock is found to be negatively related to the lagged dividend premium, establishing the competing attractiveness of dividends and repurchases based on the respective dividend and repurchase premium. I find that a greater fraction of dividend paying firms also repurchase stock when the repurchase premium has been high. Suharsimi Arikunto, Prosedur Penelitian,Jakarta: RinekaCipta. positively and significantly related to repurchase initiation and continuation decisions, after controlling for tax effects, year trends and alternate investment opportunities. L.R.Gay, Educational Research: competencies for analysis and aplication., p. I find that the lagged repurchase premium is. ![]() I propose proxies (similar to Baker and Wurgler 2004) that measure the repurchase premium. Firms cater to investor demand for repurchases by initiating repurchases when the investors place a premium on the stock prices of repurchasing firms. This paper investigates whether the decision to repurchase stock is driven by investor demand for repurchases.
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