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The effect of shareholder rights and information asymmetry on option-related repurchase activity
- Date Issued:
- 2015
- Summary:
- I investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for dividends are stronger when firms have weak shareholder rights and the level of information asymmetry positively influences managerial stock option incentives to repurchase stock. Furthermore, prior research indicates that information asymmetry is positively associated with stock repurchases. I also provide evidence indicating that the relationship between information asymmetry and stock repurchases is stronger when firms have weaker shareholder rights.
Title: | The effect of shareholder rights and information asymmetry on option-related repurchase activity. |
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Name(s): |
Golden, Nan, author Kohlbeck, Mark, Thesis advisor Florida Atlantic University, Degree grantor College of Business School of Accounting |
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Type of Resource: | text | |
Genre: | Electronic Thesis Or Dissertation | |
Date Created: | 2015 | |
Date Issued: | 2015 | |
Publisher: | Florida Atlantic University | |
Place of Publication: | Boca Raton, Fla. | |
Physical Form: | application/pdf | |
Extent: | 101 p. | |
Language(s): | English | |
Summary: | I investigate the effect of shareholder rights and information asymmetry on option-related repurchase activity. Prior research shows that the dilution effect of the exercise of the employee stock options on earnings per share (EPS) decreases the value of stock options. Thus, managers tend to use stock repurchases rather than dividends to return cash to shareholders (the dividend substitution effect). I document that the executive stock option incentives to repurchase stock as a substitute for dividends are stronger when firms have weak shareholder rights and the level of information asymmetry positively influences managerial stock option incentives to repurchase stock. Furthermore, prior research indicates that information asymmetry is positively associated with stock repurchases. I also provide evidence indicating that the relationship between information asymmetry and stock repurchases is stronger when firms have weaker shareholder rights. | |
Identifier: | FA00004373 (IID) | |
Degree granted: | Dissertation (Ph.D.)--Florida Atlantic University, 2015. | |
Collection: | FAU Electronic Theses and Dissertations Collection | |
Note(s): | Includes bibliography. | |
Subject(s): |
Corporate governance Corporations -- Finance Dividends -- Econometric models Employee stock options Investment analysis Stock options -- Econometric models |
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Held by: | Florida Atlantic University Libraries | |
Sublocation: | Digital Library | |
Links: | http://purl.flvc.org/fau/fd/FA00004373 | |
Persistent Link to This Record: | http://purl.flvc.org/fau/fd/FA00004373 | |
Use and Reproduction: | Copyright © is held by the author, with permission granted to Florida Atlantic University to digitize, archive and distribute this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder. | |
Use and Reproduction: | http://rightsstatements.org/vocab/InC/1.0/ | |
Host Institution: | FAU | |
Is Part of Series: | Florida Atlantic University Digital Library Collections. |