Investor Heterogeneity, Investor-Management Agreement and Open Market Share Repurchase

• Main Authors: HUANG, Sheng, THAKOR, Anjan V.
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2011
• Subjects: stock repurchase; corporate payout; agreement; investor heterogeneity; Finance and Financial Management; Portfolio and Security Analysis
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/3184; https://ink.library.smu.edu.sg/context/lkcsb_research/article/4183/viewcontent/HuangSZheInvestorRepurchase_06_2010.pdf
• Institution: Singapore Management University

This paper develops and tests a new theoretical explanation for why a firm conducts open-market stock repurchases. Investors may disagree with the manager about the firm’s investment projects. A repurchase causes a change in the investor base as investors who are more likely to disagree with the man...