The Impact of the Company ''s Market Timing on the Credibility of Repurchase Announcement.

• Main Authors: Shiao-Ru Peng, 彭曉茹
• Other Authors: Han-ching Huang
• Format: Others
• Language: zh-TW
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/64678155725999825444

碩士 === 中原大學 === 財務金融研究所 === 105 === In this study, we explore the influence of market timing on the actual repurchase ratio, insider trading and buy-and-hold abnormal returns by the sample of the Listed and the OTC firms in Taiwan from 2001 to 2016. According to Dittmar and Field (2015), we use relative repurchase price (RRP) to measure the strength of market timing abilities when firm repurchases its own stock. We find that the stronger market timing ability is associated with the lower actual repurchase ratio. The Listed firms with larger market values are more likely to use stock repurchase as a tool of supporting their stock prices. The stronger market timing ability is accompanied with the greater insider net buying. Thus, insiders can indeedly know the company’s future information when firms repurchased. In addition, when market timing abilities of the OTC firms are stronger, their insiders net buy transaction will have greater influence on future buy-and-hold abnormal returns. We also find that the firms with smaller market values have lower credibilities of stock repurchase, the more information contents of insider transactions and the more future buy-and-hold abnormal returns.