Stock Repurchases: Do They Add to Shareholder Value Over Time?

Abstract

This paper investigates the impact of stock repurchases on the S&P 500 companies between 2004 and 2014. Structured in three parts, we reviewed the literature in order to capture the main theories; analyzed recent evolutions, specifically to align the stock repurchase decisions between 2011 and 2015 with the market movements; and performed a panel data analysis which aimed to assess the contribution of stock repurchase and financial performance on the economic value added, earnings per share and price to book value. To conclude, the outcome highlighted mixed relationships between stock repurchases, financial performance and the independent variables of the study.