Multi-dimensional signaling with fixed-price repurchase offers

Article Abstract:

A signaling model of fixed-price repurchase offers is devised in which the proportion of repurchased and the premium paid above the stock's full-information price serve as signals of the firm's earnings and risk. The model yields four implications that are tested using a two equation empirical model and an extended version that includes alternatives such as free cash flow, shareholder heterogeneity, dividend substitute and optimal leverage. Results provide evidence to support the implications.

Stock-exchange, Stock exchanges, Stock redemption

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Stock price volatility, transaction costs and securities transactions taxes

Article Abstract:

The connection between stock price volatility and bid-ask spreads was analyzed to test the hypothesis that volatility is produced by short-term trading. Instruments called Securities Transactions Taxes (STTs) are employed to lessen stock price volatility caused by short-term speculative trading. However, results show that STTs do not necessarily lessen the effects of short-term trading but rather retard the movement of stock prices to recent information.

Public Finance Activities, Securities Taxes, Taxation, Prices and rates, Stocks, Securities, Stock prices, Market makers (Securities trading)

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