No image available for this title

Text

Stock repurchases and the EPS enhancement fallacy

A common belief among practitioners and academics is that the increased EPS associated with a stock repurchase creates value for a firm's shareholders. This belief is flawed. With the use of a numerical example and an analysis of ExxonMobil's recent stock repurchases, this article demonstrates the magnitude of the distortion that arises from using EPS to make such repurchase decisions. The effect of share repurchase is also compared with the effects of alternatives-payment of dividends and cash accumulation. Relative to cash accumulation, neither the negative effect of dividends nor the positive effect of repurchases on EPS is associated with changes in the wealth of shareholders at time zero. .Printed journal

Ketersediaan

Call NumberLocationAvailable
PSB lt.dasar - Pascasarjana1
Penerbit CFA Institute.,
Edisi -
Subjek Efficiency
Dividends
Earnings per share
studies
Shareholders wealth
Securities buybacks
ISBN/ISSN 0015198X
Klasifikasi -
Deskripsi Fisik -
Info Detail Spesifik -
Other Version/Related Tidak tersedia versi lain
Lampiran Berkas Tidak Ada Data