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The Effects of Ownership and Stock Liquidity on the Timing of Repurchase TransactionsAmedeo De CesariAston University - Aston Business School - Finance & Accounting Group Susanne EspenlaubUniversity of Manchester - Manchester Business School Arif KhurshedUniversity of Manchester - Manchester Business School, Division of Accounting Finance Michael SimkovicSeton Hall Law School; Harvard Law School - John M. Olin Center for Law and Economics June 6, 2012 Abstract: We analyze detailed monthly data on U.S. open market stock repurchases (OMRs) that recently became available following stricter disclosure requirements. We find evidence that OMRs are timed to benefit non-selling shareholders. We present evidence that the profits to companies from timing repurchases are significantly related to ownership structure. Institutional ownership reduces companies’ opportunities to repurchase stock at bargain prices. At low levels, insider ownership increases timing profits and at high levels it reduces them. Stock liquidity increases profits from timing OMRs.
Number of Pages in PDF File: 59 Keywords: open market repurchase, timing, ownership, liquidity JEL Classification: G35, G38 working papers seriesDate posted: July 12, 2011 ; Last revised: August 26, 2012Suggested CitationContact Information
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