INTERDEPENDENCE OF STOCK VALUES ON STOCK EXCHANGE, THE MOTIVES AND THE VOLUME OF STOCK REPURCHASES
Keywords:
share buybacks, share value, financial position, crisisAbstract
Analysis of the interdependence of stock values on stock exchange and the stock repurchases in the U.S., shows that the most extensive stock repurchases were carried out at the highest prices, when it was likely that the stocks were overestimated, while the stock repurchases were far more cautious in terms of clear undervaluation of stocks, even at high liquidity reserves. It turns out, that companies behave exactly the opposite of other investors: buy stocks when they are most expensive, rather than when they are least expensive. The next conclusion of the analysis is, that in times of devastating crises in the best interest of the company and existing of investors, interested in the company, is to wait until the crisis reaches the bottom and the value of stocks reached its lowest point, because it was shown that the stock repurchases, did not increased stock value, but also was unable to stop or decrease their value.
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References
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2. Bartov E., Krinsky, I., Lee, J., Evidence on How Companies Choose Between Dividends and Open-Market Stock Repurchases. Joumal of Applied Corporate Finance, 11, 1998
3. Bartov E., Open-Market Stock Repurchases as Signals for Earnings and Risk Changes , Journal of Accounting & Economics, vol. 14, n° 3, 1991
4. Bens D. A., Nagar V., Skinner D. J., Franco Wong M.H., Employee stock options, EPS dilution, and stock repurchases, Journal of Accounting and Economics, vol. 36, n° 1-3, 2003
5. Brealey, R., Myers, S., Principles of Corporate Finance, seventh ed. McGrawHill Irwin, New York, 2003
6. Comment, R., Jarrell, G.А., The Relative Signalling Power of Dutch-Auction and Fixed-Price Self-Tender Offers and Open-Market Share Repurchases, Journal of Finance, September 1991
7. Dann, L.Y., Common Stock Repurchases: An Analysis of Returns to Bondholders and Stockholders, Journal of Financial Economics, June 1981.
8. Dittmar A. K., Why do Firms repurchase Stock, Journal of Business, vol. 73, n° 3, 2000
9. Дугалић, В., Показатељи цена на тржиштима акција, Мегатренд ревија, вол. 5, бр. 1, 2008
10. Fabozzi, F., Peterson, P.: Financial Management and Analysis, Second Edition, John Wiley & Sons Inc., 2003
11. Fenn, W., Liang, L., Corporate Payout Policy and Managerial Stock Incentives, Journal of Financial Economics, 57, 2001
12. Grullon G., Michaely R., The information content of share repurchase programs, The Journal of Finance, vol. 59, n° 2, 2004
13. Hegstrom, R.G. (2006): Voren Bafet za sva vremena. Principi stari ekonomija nova, Beograd: Plato, Cardea, 2006
14. Henry, D., Why the flurry of buybacks? Business Week, 29 November, 2004
15. Hurtt, D., Kreuze, J., Langsam, S., Stock Buybacks and Their Association with Stock Options Exercised in the IT Industry, American Journal of Business, vol. 23. No. 1, Spring 2008
16. Jolls, C. Stock Repurchases and Incentive Compensation. NBER Working Paper, No. 6467, 1998
17. Kahle, M., When a Buyback isn't a Buyback: Open Market Repurchases and Employee Options, Journal of Financial Economics, 2002
18. Lanoue, N., Peltier-Rivest, D., Manipulation des bénéfices et rachats d actions, Revue française de gestion – N° 197/2009
19. Li, K., McNally, W., Information Signalling or Agency Conflicts: What Explains Canadian Open Market Share Repurchases?, Working paper, University of British Columbia, 2000
20. Liano, K., Huang, G., Manakyan, H., Market Reaction to Open Market Stock Repurchases and Industry Affiliation, Quarterly Journal of Business & Economics, Vol. 42, Nos. 1 and 2, 2003
21. Nordström, K., Ridderstrâle, J., Funky Business, BookHouse Publishing AB, Stockholm, 2002. У преводу Плато, Београд, 2004
22. Павловић., В., Откуп сопствених акција - циљеви, методи и ефекти, Рачуноводство, бр. 3/4, СРРС, Београд, 2010
23. Pettit, J., Is a Share Buyback Right for You?, Harvard Business Review, Vol 79, No. 40, April 2001
24. Quiry, P, Le Fur, Y., Les rachats d'actions, Les Echos, 28 octobre 2004
25. Siegel, M., Accounting shenanigans on the cash flow statement, The CPA Journal, March, 2006
26. Silverblatte, H., Companies Are back in The Share Buyback Mode, Bloomberg Businessweek, Investing, June 24, 2010
27. Song, O., Hidden social costs of open market share repurchases. Journal of Corporation Law (Spring), 2002
28. Стевановић, С., Ђоровић, М., Милановић, М. Светска финансијска криза и њене последице на привреду Србије, Економика пољопривреде, вол.57 бр. 3, 2010
29. Тодоровић, М., Чему служе откупи (сопствених) акција?, Економика предузећа, бр. 7-8, 2008
30. Vermaelen, T., Common Stock Repurchases and Market Signaling: An Empirical Study, Journal of Financial Economics, June 1981
31. Vernimenn, P., Quiry P., Le Fur, Y., Finance dentreprise, 7e édition par Pascal Quiry & Yann Le Fur. Paris: Dalloz, 2010
32. Weston J.F., Siu J.A., Changing Motives for Share Repurchases, Working paper, University of California, 2003
33. Yglesias, M., Share Buybacks, 18.06.2010. www.yglesias.thinkprogress.org
34. Žižek, S., To each according to his greed, Harper's Magazine, 10/2009.
Интернет странице:
33. www.fasb.org
34. www.businessweek.com.
35. www.harpers.org
36. www.yglesias.thinkprogress.org
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Published
2011-06-30
How to Cite
Pavlović, V., & Muminović, S. (2011). INTERDEPENDENCE OF STOCK VALUES ON STOCK EXCHANGE, THE MOTIVES AND THE VOLUME OF STOCK REPURCHASES. Ekonomika Poljoprivrede, 58(2), 265–280. Retrieved from https://ea.bg.ac.rs/index.php/EA/article/view/702
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Original scientific papers
