An investigation of the relationship between Dutch auction repurchase tender offers and cash dividend payments

Managerial Finance - Tập 26 Số 8 - Trang 29-40 - 2000
JamesForjan1, DavidDurr2, JohnThesis3
1York College of Pennsylvania
2University of Houston‐Downtown
3University of Texas‐Permian Basin

Tóm tắt

It is well established in academic literature that self‐tender offers and corporate dividends can be used independently to effectively signal firm value. It is unclear, however, whether these two forms of earnings distributions can be used simultaneously. This paper is an empirical examination of the relationship between dutch auction repurchases and corporate dividend policy. This research indicates that a substantial number of firms choose to repurchase their shares in the form of dutch auctions between dividend payments. Because signalling is a likely motivation for both repurchases and cash dividends, these two events may not be independent of each other. The results of this study confirm positive stock market reaction to repurchase announcements and that firm prediction errors are significantly related to signaling variables.

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Tài liệu tham khảo

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Managerial Finance

Tập 26 Số 8

29-40

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