Abstract

http://ssrn.com/abstract=923611
 
 

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Repurchase Tender Offers and Earnings Information


Larry Dann


University of Oregon - Department of Finance

Ronald W. Masulis


University of New South Wales - Australian School of Business; European Corporate Governance Institute (ECGI); Financial Research Network (FIRN)

David Mayers


University of California, Riverside - A. Gary Anderson Graduate School of Management


Journal of Accounting and Economics, Vol. 14, pp. 217-251, 1991

Abstract:     
Announcements of stock repurchase tender offers are examined as a source of information to the market on the firm's future earnings prospects and market risk level. We find positive average earnings surprises and equity systematic risk reductions following tender offers but not, in most instances, preceding them. We find positive stock price reactions to tender offer announcements to be positively correlated with earnings surprises over the concurrent and subsequent two years, and negatively correlated with changes in equity and firm market risk. Finally, stock price reactions to quarterly earnings announcements are more strongly correlated with time-series based earnings surprises in the year prior to the tender offer than during the subsequent year, consistent with tender offer announcements conveying earnings information to the market.

Number of Pages in PDF File: 50

Keywords: Tender offer, stock repurchase, earnings announcement, earnings surprise, systematic risk, beta

JEL Classification: G14, G32, G35, M41

Accepted Paper Series


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Date posted: August 11, 2006  

Suggested Citation

Dann, Larry and Masulis, Ronald W. and Mayers, David, Repurchase Tender Offers and Earnings Information. Journal of Accounting and Economics, Vol. 14, pp. 217-251, 1991. Available at SSRN: http://ssrn.com/abstract=923611

Contact Information

Larry Y. Dann
University of Oregon - Department of Finance ( email )
Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States
(541) 346-3330 (Phone)
Ronald W. Masulis (Contact Author)
University of New South Wales - Australian School of Business ( email )
Sydney, NSW 2052
Australia
612-9385-5860 (Phone)
612-9385-6347 (Fax)

European Corporate Governance Institute (ECGI) ( email )
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

David Mayers
University of California, Riverside - A. Gary Anderson Graduate School of Management ( email )
Riverside, CA 92521
United States
909-787-3443 (Phone)
909-787-2933 (Fax)
Feedback to SSRN


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