Adverse Information and Dealer Spreads: Evidence from Dutch Auction Repurchases

Autor:	Michael S. McCorry, James M. Forjan
Rok vydání:	1997
Předmět:	TheoryofComputation_MISCELLANEOUS Managerial decision Economics and Econometrics Earnings Financial economics Dutch auction TheoryofComputation_GENERAL Information asymmetry Shareholder Open market operation ComputingMilieux_COMPUTERSANDSOCIETY Business Private information retrieval Finance Stock (geology)
Zdroj:	The Financial Review. 32:729-750
ISSN:	1540-6288 0732-8516
DOI:	10.1111/j.1540-6288.1997.tb00908.x
Popis:	The Dutch auction repurchase has become an increasingly popular alternative to open market repurchases and self-tender offers for the distribution of earnings to shareholders. In a Dutch auction, the repurchase price is not determined by a managerial decision, but by shareholders. The extent to which a Dutch auction signals private information is tested by examining stock returns and bid-ask spreads. Stock prices increase and bid-ask spreads widen during the announcement of a Dutch auction; prices decrease and spreads narrow at expiration. Because of the uncertainty surrounding the final repurchase price, Dutch auctions initially increase the risk to which security dealers are exposed. As information asymmetry among managers, investors, and dealers is reduced at expiration, security dealers no longer need to protect themselves from information trades.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::193e8e660d701e36e13ecc6cb55d306d https://doi.org/10.1111/j.1540-6288.1997.tb00908.x Zobrazit plný text záznamu Plný text ve formátu PDF Plný text ve formátu HTML
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