Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Entire DC Network
A Re-Examination Of Stock Repurchase In Usa, Hua Yang
A Re-Examination Of Stock Repurchase In Usa, Hua Yang
Theses and Dissertations in Business Administration
Since the adoption of U.S. Securities and Exchange Commission (SEC) Rule 10b-18 Safe Harbor for Issuer Repurchases in 1982, stock repurchases have been growing explosively. Extant literature has shed some light on the motivation behind companies' repurchase activities. The most popular beliefs include signaling undervaluation (Dann 1981, Vermaele 1981, Comment and Jarrell 1991), reducing free cash flow (Guay and Harford 2000, Jagannathan, Stephens and Weisbach 2000, Grullon and Michaely 2004), raising leverage ratio (Hovakimian, Opler and Titman 2001) and increasing earnings (Bens, Nagar, Skinner and Wong 2003).
Motivated by Stephens and Weisbach's (1998) research which found that companies on average …