Open AccessAnalysis of Share Buyback Announcements on Stock Price Returns: A Study of BSE Listed Stocks
Author(s) -
Vaddula V. Krishna Reddy
Publication year - 2020
Publication title -
ira-international journal of management and social sciences
Language(s) - English
Resource type - Journals
ISSN - 2455-2267
DOI - 10.21013/jmss.v16.n3.p4
Subject(s) - null hypothesis , shareholder , statistic , event study , share price , business , sample (material) , abnormal return , stock price , stock (firearms) , monetary economics , economics , stock exchange , finance , econometrics , statistics , corporate governance , mathematics , engineering , mechanical engineering , paleontology , context (archaeology) , chemistry , chromatography , series (stratigraphy) , biology
Buyback is a procedure that enables a company to repurchase its shares from its existing shareholders, usually at a price near to or higher than the prevailing market price. The present study is based on secondary data and the event window period of 21 days (10 days before the announcement and 10 days after the announcement) are taken to measure its impact. Based on data availability 24 sample companies cover public sector undertakings and information technology companies selected for the study. The cumulative abnormal return for the entire 21-day period is 1.31%. T-statistic 2.066 with p-value (0.069 > 0.05) at a 5% level of significance indicates that accept the null hypothesis and conclude that there is a significant difference of ARR between pre and post buyback announcement of sample companies.