Persistent Link:
http://hdl.handle.net/10150/186799
Title:
Essays on repurchases and tender offers.
Author:
Stephenson, Craig Allen.
Issue Date:
1994
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
This thesis examines stock repurchases. Chapter 1 begins the study by discussing and testing several possible motivations for stock buy backs, including firm undervaluation, changes in firm capital structure, expropriation from debtholders, distribution of free cash flow, and signalling informed insiders' asymmetric information to the market. Empirical tests of these hypothesized motivations are consistent with undervaluation and signalling reductions in firm risk, but inconsistent with the capital structure, expropriation, and free cash flow hypotheses. The remainder of the thesis focuses on the determinants of repurchase premiums. Chapter 2 begins with a discussion of the mechanics of share repurchase, before developing two competing hypotheses regarding repurchase premiums. The first is the liquidity hypothesis, which posits that supply curves for shares are perfectly elastic, and repurchase premiums are a function of the substitutability and liquidity of the stock. The heterogeneity hypothesis, in contrast, holds that supply curves for shares are upward-sloping, and repurchase premiums are a function of any factor that affects either the slope of the supply curve or the demand for shares along the supply curve. Chapter 2 concludes by developing a formal model of repurchase premiums, for use in empirical tests of the alternative hypotheses, which are conducted in Chapter 3. Results of these tests are inconsistent with the liquidity hypothesis, as repurchase premiums are not found to be a function of substitutability or liquidity. Repurchase premiums, however, are consistent with the heterogeneity hypothesis, as they are found to be a significant function of the variability of stockholder consensus about the stock, and the variability of the capital gains tax lock-in effect between shareholders.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Economics.; Accounting.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Business Administration; Graduate College
Degree Grantor:
University of Arizona

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleEssays on repurchases and tender offers.en_US
dc.creatorStephenson, Craig Allen.en_US
dc.contributor.authorStephenson, Craig Allen.en_US
dc.date.issued1994en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractThis thesis examines stock repurchases. Chapter 1 begins the study by discussing and testing several possible motivations for stock buy backs, including firm undervaluation, changes in firm capital structure, expropriation from debtholders, distribution of free cash flow, and signalling informed insiders' asymmetric information to the market. Empirical tests of these hypothesized motivations are consistent with undervaluation and signalling reductions in firm risk, but inconsistent with the capital structure, expropriation, and free cash flow hypotheses. The remainder of the thesis focuses on the determinants of repurchase premiums. Chapter 2 begins with a discussion of the mechanics of share repurchase, before developing two competing hypotheses regarding repurchase premiums. The first is the liquidity hypothesis, which posits that supply curves for shares are perfectly elastic, and repurchase premiums are a function of the substitutability and liquidity of the stock. The heterogeneity hypothesis, in contrast, holds that supply curves for shares are upward-sloping, and repurchase premiums are a function of any factor that affects either the slope of the supply curve or the demand for shares along the supply curve. Chapter 2 concludes by developing a formal model of repurchase premiums, for use in empirical tests of the alternative hypotheses, which are conducted in Chapter 3. Results of these tests are inconsistent with the liquidity hypothesis, as repurchase premiums are not found to be a function of substitutability or liquidity. Repurchase premiums, however, are consistent with the heterogeneity hypothesis, as they are found to be a significant function of the variability of stockholder consensus about the stock, and the variability of the capital gains tax lock-in effect between shareholders.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectEconomics.en_US
dc.subjectAccounting.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineBusiness Administrationen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.identifier.proquest9502602en_US
dc.identifier.oclc700948462en_US
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