Article Title
Document Type
Article
Abstract
The tremendous increase in share repurchases warrants an explanation. Why have firms increasingly turned to repurchases as a payout method? Undervaluation is commonly touted as the underlying reason behind repurchase decisions. This paper identifies several possible rationales behind repurchase decisions, in addition to undervaluation, by examining the relative advantages of share repurchases over dividends and the managerial incentives associated with share repurchases. The findings indicate managerial incentives are a key factor behind the decision to repurchase stock.
Publication Date
Spring 2012
Journal Title
Major Themes in Economics
Volume
14
Issue
1
First Page
55
Last Page
75
Copyright
©2012 by Major Themes in Economics
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Language
en
File Format
application/pdf
Recommended Citation
Voss, Jordan
(2012)
"Why do Firms Repurchase Stock?,"
Major Themes in Economics, 14, 55-75.
Available at:
https://scholarworks.uni.edu/mtie/vol14/iss1/6