Flexibility in share repurchases: Evidence from UK

Although firms cite flexibility as important when repurchasing shares, we know little about how or why firms vary repurchases. We use an extensive sample of daily repurchase transactions from the United Kingdom to investigate how the number of repurchase days and volumes of shares repurchased change...

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Bibliographic Details
Published in:European financial management : the journal of the European Financial Management Association 2023-01, Vol.29 (1), p.196-246
Main Authors: Kulchania, Manoj, Sonika, Rohit
Format: Article
Language:English
Subjects:
Accumulation
Companies
Earnings
Flexibility
market timing
payout
repurchases
Stock prices
Transactions
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Summary:Although firms cite flexibility as important when repurchasing shares, we know little about how or why firms vary repurchases. We use an extensive sample of daily repurchase transactions from the United Kingdom to investigate how the number of repurchase days and volumes of shares repurchased change based on several known motivations. We find that stock price changes, liquidity, leverage, takeover activity and earnings per share targets impact share repurchasing patterns. Further, we compare actual repurchases to alternative share accumulation strategies and find that firms utilize flexibility without paying higher costs.
ISSN:1354-7798
1468-036X
DOI:10.1111/eufm.12359