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Buybacks: short-term effect and future implications for the United States stock market
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Orientador(es)
Resumo(s)
The main purpose of this work was to analyze the impact of stock buybacks on the American
stock market. Firstly, the abnormal returns on the days following a repurchase transaction
were calculated, and evidence was found that there are positive cumulative average abnormal
returns on the days following it. Additionally, the Earnings-per-Share’s impact was analyzed
indicating that there is some inflation of this metric due to buybacks. Finally, the evolution of
the firms’ financial strength was analyzed, allowing to conclude that this buyback trend is
harming the companies’ balance sheets and might endanger them in the future.
Descrição
Palavras-chave
Share buybacks Credit ratings Earnings-per-share.