The Stock Market Reaction to Significant Tender Offer Repurchases of Stock: Size and Purpose Perspective |
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| Authors: | Wallace N Davidson III Sharon H Garrison |
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| Institution: | Louisiana Tech University, Ruston, LA 71272.;East Tennessee State University, Johnson City, TN 37614. The authors thank the referee for his many helpful comments. |
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| Abstract: | This paper uses event methodology to examine the impact of common stock repurchases on the repurchasing firm's common stock returns, including examination of various subsamples to test the effects of size and purpose of repurchase. Although the market reacts positively to general repurchase announcements, it reacts negatively to those repurchases used to fend off takeover attempts and does not react at all to stock repurchases for employee stock option plan (ESOP) purposes. |
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