Seasoned equity offerings, repurchases, and deviations from optimal CEO ownership

Z Tong

doi:10.1016/j.frl.2009.11.005

Seasoned equity offerings, repurchases, and deviations from optimal CEO ownership

Z Tong

Research output: Contribution to journal › Article › peer-review

1 Citation (Scopus)

Abstract

This paper empirically tests the transaction cost theory of managerial ownership in the settings of seasoned equity offerings (SEOs) and repurchases. SEOs and repurchases result in changes of managerial ownership due to non-contracting reasons. We use a benchmark specification to obtain the measures of optimal CEO ownership and deviations from the optimum. We find that SEOs and repurchases are associated with a higher (lower) abnormal return if they move CEO ownership towards (away from) the optimal level. The findings are consistent with the transaction cost theory of managerial ownership. © 2009 Elsevier Inc. All rights reserved.

Original language	Undefined
Pages (from-to)	29-38
Number of pages	10
Journal	Finance Research Letters
Volume	7
Issue number	1
DOIs	https://doi.org/10.1016/j.frl.2009.11.005
Publication status	Published (in print/issue) - 1 Mar 2010

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10.1016/j.frl.2009.11.005

Cite this

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abstract = "This paper empirically tests the transaction cost theory of managerial ownership in the settings of seasoned equity offerings (SEOs) and repurchases. SEOs and repurchases result in changes of managerial ownership due to non-contracting reasons. We use a benchmark specification to obtain the measures of optimal CEO ownership and deviations from the optimum. We find that SEOs and repurchases are associated with a higher (lower) abnormal return if they move CEO ownership towards (away from) the optimal level. The findings are consistent with the transaction cost theory of managerial ownership. {\textcopyright} 2009 Elsevier Inc. All rights reserved.",

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