Journal article
Valuation effects of open market stock repurchases for financially weak firms
Review of financial economics, v 2(2), pp 29-42
01 Apr 1993
Abstract
The proposition that announcements of open market stock repurchases improve the flow of positive information regarding the firm's prospects, particularly for financially weak firms, is tested. For financially strong firms with already good prospects of cash flows, the role of stock repurchases is less important. Evidence is provided for an inverse relationship between financial risk, measured by bond rating, and the magnitude of stock repurchase-induced abnormal returns. Results also suggest that the value of information implied by announcements of open market repurchases about increases in cash flows and leverage, is more important for financially weak firms than for financially strong firms.
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Details
- Title
- Valuation effects of open market stock repurchases for financially weak firms
- Creators
- George Tsetsekos
- Publication Details
- Review of financial economics, v 2(2), pp 29-42
- Publisher
- Elsevier Science Ltd
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Other Identifier
- 991021881406304721