| Summary: | 碩士 === 朝陽科技大學 === 會計所 === 95 === This study examines the information content (firm specific) and information transfer (intra-industry rival firms) effects of stock repurchase announcements using the sample firms that allege and announce “we are obligated to protect the rights of our stockholders and the credibility of the firm” to the market. In the paper, both the event-study and regression model have been used to explore the key analysis.
The empirical results show that stock repurchase announcements conveys information about the firms that are undervalued and thus the investors look on them as prospective firms with prosperity. It is also evidenced that the intra-industry rival firms gained positively reaction of stock price but not statistically significant when the stock repurchase is announced. According to above, the present study concludes that, in Taiwan, the intra-industry contagion effect dominates over competitive effect when stock repurchase is announced. These results, to some extent, consistent with the conjecture of Otchere and Ross (2002), Chen-Hsiang Yu (2002) and Kuan-Jen Huang (2003), moderately confirm the argument that stock repurchase announcements transfers intra-industry stock undervaluation information.
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