PRLog (Press Release) -
May 05, 2010 -
In general, if markets are efficient and an asset is fairly priced, then there shouldn't be any excess returns at all and everything is a zero NPV project in theory. But there are three reasons why a stock price should go up upon a share repurchase: (i) Financial / Mathematical:
reduces shares outstanding, increases EPS, constant PE, stock price up; (ii) Behavioral Finance: signaling effect, mgmt thinks stock undervalued, buy low, sell high; and (iii) Economic: reduced supply, increased demand. But in each of those three cases, it's the market's inefficient response!
Learn investment banking fundamentals, valuation techniques, financial modeling, equity research with ARC Academia, India office of Wall St. Training. ARC-WST provides weekend training programmes and workshops in the areas of Investment Banking, Financial Research & Analysis, Fund Raising Activities and Financial Modeling and Forecasting techniques. The workshops are conducted in National Capital - New Delhi, Financial Capital - Mumbai and the IT Capital – Bangalore.
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http://www.prlog.org/10662854/1Learn investment banking fundamentals, valuation techniques, financial modeling, equity research with ARC Academia, India office of Wall St. Training. ARC-WST provides weekend training programmes and workshops in the areas of Investment Banking, Financial Research & Analysis, Fund Raising Activities and Financial Modeling and Forecasting techniques. The workshops are conducted in National Capital - New Delhi, Financial Capital - Mumbai and the IT Capital – Bangalore.
