Buyback Announcements of Small Market Capitalized Firms and the Shareholders’ Value Creation

International Journal of Advanced Scientific Research and Management, Volume 3 Issue 5, May 2018

6 Pages Posted: 19 Apr 2019

See all articles by Hiral Vyas

Hiral Vyas

GLS University

Patel R. K.

Hemchandracharya North Gujarat University

Date Written: May 25, 2018

Abstract

Share repurchase commonly known as buyback in India, represents reverse process than issue of shares. Share buyback are carried out with different motives. A buyback generally refers to a corporate restructuring tool where, company through different options offer existing shareholders usually better price than price prevailing in the market. Reactions of such announcements towards market equilibrium idea and share holders’ value creation through abnormal return over market is studied with the help of event study methodology – market adjusted model. This study examines the announcements of buyback of shares by small capitalized companies during year 2010-2016. An analysis of security price performance over benchmark index surrounding 21 days i.e. 10 days pre and post days of the announcements suggest negligible return on the day of announcements and negative average abnormal return in said range.

Keywords: Buyback, Event study, Shareholders value

Suggested Citation

Vyas, Hiral and R. K., Patel, Buyback Announcements of Small Market Capitalized Firms and the Shareholders’ Value Creation (May 25, 2018). International Journal of Advanced Scientific Research and Management, Volume 3 Issue 5, May 2018, Available at SSRN: https://ssrn.com/abstract=3358090

Hiral Vyas (Contact Author)

GLS University ( email )

Law Garden
Elisbridge
Ahmedabad
India

Patel R. K.

Hemchandracharya North Gujarat University ( email )

Patan 384265
India

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
72
Abstract Views
641
Rank
585,331
PlumX Metrics