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The determinants of the effect of share repurchase announcements on the stock returns of technology companies

Koopmans, G B K (2022) The determinants of the effect of share repurchase announcements on the stock returns of technology companies.

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Abstract:In this study, the short-term effect of share repurchase announcements on the stock returns of technology companies and the influence of two possible predictor variables upon this effect will be investigated. The effect of share repurchase announcements is examined through an event study and the influence of the predictor variables on this effect will be analyzed through regression analysis. The sample of repurchases consists of 114 repurchase announcements made from 2010 to the end of 2019. The statistically significant cumulative average abnormal return that was found for the isolated announcement window [0,1] is 1.732% with outliers and 1.722% excluding outliers. After this was proven the influence of the predictor variables, being the Market-to-Book value, and the Free Cash Flow on the stock returns was analyzed through a regression. Even though the coefficients of both of the predictor variables aligned with the posed hypotheses, the cumulative abnormal returns were not successfully explained by the predictor variables and there was little significance to these variables. Future research should be done to better explain the cumulative abnormal returns by adding relevant variables that have been omitted in this study.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:https://purl.utwente.nl/essays/90601
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