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Volume 32 Number 2 December 2007 |
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The Announcement Effects of Off-Market Share Repurchases in Australia |
| Christine Brown
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Abstract |
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This paper investigates the price and volume behaviour around the announcement of a type of off-market repurchase (equal access repurchases) in Australia. In contrast to US studies which document abnormal returns of around 8% for off-market
repurchases, we find much smaller but significant abnormal returns of around 1.2% on the announcement date for equal access repurchases. The evidence suggests
that the abnormal returns are related to the discount-to-market price at which the offer is made (which reflects special taxation arrangements). We also document a dramatic increase in trading volume on the announcement and subsequent day and argue that this trading may be motivated by the level of tax benefits passed
on to participating shareholders.
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Keywords |
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IMPUTATION; BUYBACK; REPURCHASE; OFF-MARKET; EQUAL ACCESS
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Contact DetailsChristine BrownDepartment of Finance, The University of Melbourne VIC Email: christine.brown@unimelb.edu.au |
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