The Optimal Timing of Open Market Stock Repurchases

Chih-Chen Hsu and Andreas Krause

Emerging Markets Finance and Trade, 2016, vol. 52, issue 4, 776-785

Abstract: Using a continuous-time real options approach we determine the conditions under which a value-maximizing company would conduct an open market stock repurchase to exploit the undervaluation of shares. We find the optimal timing of such repurchases as well as the optimal amount a company should repurchase and analyze how it depends on market parameters. Obtaining the announcement returns from the authorization of stock repurchases from our model allows us to derive testable empirical implications.

Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2015.1117840 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:52:y:2016:i:4:p:776-785

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2015.1117840

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().