Errors in Estimating Share Repurchases
University of Virginia (UVA) - McIntire School of Commerce
Edward Alexander Dyl
University of Arizona
Kathleen M. Kahle
University of Arizona - Department of Finance
June 12, 2008
Journal of Corporate Finance, Vol. 14, No. 4, 2008
We examine the accuracy of various estimates of firms' repurchases of common stock used in earlier studies, and find high error rates in the most commonly used estimators. We also find that the procedure used to estimate open market share repurchases can significantly impact results. The Compustat-based measure, which is the most accurate, deviates from the actual number of shares repurchased by more than 30% in about 16% of the cases. We conclude that many studies should be revisited now that the SEC mandates disclosure of precise information about share repurchases in Forms 10-Q and 10-K.
Number of Pages in PDF File: 42
Keywords: stock repurchases, share repurchases
JEL Classification: G12, G35
Date posted: June 16, 2008 ; Last revised: October 13, 2010
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