Buybacks versus Ordinary Dividends: Marginal Investor Reactions to Cash-return Announcements (2013)

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Type of Content
Discussion / Working PapersPublisher
University of Canterbury. Department of Economics and FinanceCollections
- Business: Working Papers [193]
Abstract
This paper examines the stock price effect in New Zealand of announcements of increases in dividends and of share repurchases from 1993 to 2009. The results are related to the soft substitution hypothesis on Australian data. Dividend-increase announcements provoke a greater positive effect on the stock price than buyback announcements. The preference of the marginal investor is also examined when firms distribute cash through both mechanisms. Again, investors prefer dividend increases over repurchases, and do so to a greater degree than for firms that only use one form of distribution.
Citation
Anderson, W., McLaughlin, S. (2013) Buybacks versus Ordinary Dividends: Marginal Investor Reactions to Cash-return Announcements..This citation is automatically generated and may be unreliable. Use as a guide only.
Keywords
Event Study; Dividends; Stock Repurchases; Abnormal ReturnsANZSRC Fields of Research
35 - Commerce, management, tourism and services::3502 - Banking, finance and investment::350208 - Investment and risk management38 - Economics::3801 - Applied economics::380107 - Financial economics
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