Seasoned equity offerings, repurchases, and deviations from optimal CEO ownership

Zhenxu Tong

Finance Research Letters, 2010, vol. 7, issue 1, 29-38

Abstract: This paper empirically tests the transaction cost theory of managerial ownership in the settings of seasoned equity offerings (SEOs) and repurchases. SEOs and repurchases result in changes of managerial ownership due to non-contracting reasons. We use a benchmark specification to obtain the measures of optimal CEO ownership and deviations from the optimum. We find that SEOs and repurchases are associated with a higher (lower) abnormal return if they move CEO ownership towards (away from) the optimal level. The findings are consistent with the transaction cost theory of managerial ownership.

Keywords: CEO; ownership; Seasoned; equity; offerings; Repurchases (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544-6123(09)00060-9
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:7:y:2010:i:1:p:29-38

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().