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Interdependence Of Stock Values On Stock Exchange, The Motives And The Volume Of Stock Repurchases

Author

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  • Pavlovic, Vladan
  • Muminovic, Sasa

Abstract

Analysis of the interdependence of stock values on stock exchange and the stock repurchases in the U.S., shows that the most extensive stock repurchases were carried out at the highest prices, when it was likely that the stocks were overestimated, while the stock repurchases were far more cautious in terms of clear undervaluation of stocks, even at high liquidity reserves. It turns out, that companies behave exactly the opposite of other investors: buy stocks when they are most expensive, rather than when they are least expensive. The next conclusion of the analysis is, that in times of devastating crises in the best interest of the company and existing of investors, interested in the company, is to wait until the crisis reaches the bottom and the value of stocks reached its lowest point, because it was shown that the stock repurchases, did not increased stock value, but also was unable to stop or decrease their value.

Suggested Citation

  • Pavlovic, Vladan & Muminovic, Sasa, 2011. "Interdependence Of Stock Values On Stock Exchange, The Motives And The Volume Of Stock Repurchases," Economics of Agriculture, Institute of Agricultural Economics, vol. 58(2).
    • Handle: RePEc:ags:iepeoa:244926
    DOI: 10.22004/ag.econ.244926
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