Buybacks versus Ordinary Dividends: Marginal Investor Reactions to Cash-return Announcements

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Title

Buybacks versus Ordinary Dividends: Marginal Investor Reactions to Cash-return Announcements

Content partner

University of Canterbury Library

Collection

UC Research Repository

Description

This paper examines the stock price effect in New Zealand of announcements of increases in dividends and of share repurchases from 1993 to 2009. The results are related to the soft substitution hypothesis on Australian data. Dividend-increase announcements provoke a greater positive effect on the stock price than buyback announcements. The preference of the marginal investor is also examined when firms distribute cash through both mechanisms. Again, investors prefer dividend increases over re...

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Format

Research paper

Research format

Working or discussion paper

Date created

2013

Creator

Anderson, W. / McLaughlin, S.

URL

http://hdl.handle.net/10092/10238

Related subjects

Event Study / Dividends / Stock Repurchases / Abnormal Returns / Commerce, management, tourism and services / Banking, finance and investment / Investment and risk management / Economics / Applied economics / Financial economics

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