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- W3022955972 abstract "Why is the mere announcement of an open-market share repurchase program, which involves no commitment to purchase shares, regarded as good news by the market? We develop a theoretical model to resolve this puzzle. The model predicts that firms with large underpricing can attract attention from speculators by announcing repurchases, and the subsequent trades from these speculators lead to value corrections. Firms with small underpricing, however, cannot attract attention by announcing repurchases, and these firms have to use costly share repurchases as a value-correcting signal. We then provide empirical evidence corroborating the predictions of the theoretical model." @default.
- W3022955972 created "2020-05-13" @default.
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- W3022955972 date "2015-05-27" @default.
- W3022955972 modified "2023-10-06" @default.
- W3022955972 title "The Share Repurchase Announcement Puzzle: Theory and Evidence" @default.
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- W3022955972 doi "https://doi.org/10.1093/rof/rfv020" @default.
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