Share repurchases: abnormal performance and motives behind the announcements

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bachelor_Salomaa_Jerry_2020.pdf (303.42 KB)
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Volume Title
School of Business | Bachelor's thesis
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Author
Date
2020
Department
Rahoituksen laitos
Major/Subject
Mcode
Degree programme
Rahoitus
Language
en
Pages
29+5
Series
Abstract
In this paper I study the short- and long-term abnormal returns around open-market share repurchase program announcements. I focus on announcements in Western Europe from 1990 to 2020. Additionally, I obtain cross-sectional regressions aiming to understand the factors causing the abnormalities. I find statistically significant announcement returns of 1.06% and long-term cumulative abnormal returns of 14.2%. The closer examination of the returns does not suggest that either short-term or long-term returns are in decline. The results fail to find an explicit explanation for the initial impact of the announcement, such as the signaling undervaluation hypothesis or agency theory.
Description
Thesis advisor
Spickers, Theresa
Keywords
share repurchase, signaling undervaluation, announcement returns, agency theory
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https://urn.fi/URN:NBN:fi:aalto-202101241328
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[kand] Kauppakorkeakoulu / BIZ (Open Access)