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Accelerated Share Repurchases, Leonce Bargeron, Manoj Kulchania, Shawn Thomas
Accelerated Share Repurchases, Leonce Bargeron, Manoj Kulchania, Shawn Thomas
Finance Faculty Research and Publications
Accelerated share repurchases (ASRs) are credible commitments by firms to repurchase shares immediately. Including an ASR in a repurchase program reduces the flexibility that firms have to alter an announced program in response to subsequent changes in the price and liquidity of its shares, unexpected shocks to cash flow and/or investment, etc. Thus, we investigate whether firms’ decisions to include ASRs in their repurchase programs are associated with factors expected to influence the costs of lost flexibility and the benefits of enhanced credibility and immediacy. We find robust evidence consistent with the costs of lost flexibility and the benefits of …