Pub Date : 2019-03-19DOI: 10.35609/jfbr.2019.4.1(5)
C. Chee, N. H. A. Razak
Objective - This study investigates whether private information newly incorporated into stock price enhances performance in timing share repurchases. Methodology/Technique - Cost saving gained in share repurchases is used a proxy for performance of market-timing in share repurchases and firm-specific stock return variation is used to gauge stock price informativeness. A sample of 334 U.S. repurchasing firms are tested using panel data regression. Findings - The paper concludes that managers possess better market timing skill by obtaining more cost saving from their share repurchases when private information is reflected in stock price. Stock price informativeness may be the tool for managers to improve their market timing skill to take advantage of the stock market. Furthermore, firms with smaller size and a higher market-to-book ratios, and firms with higher cash-to-assets ratios are found to achieve more cost saving in buying back their shares indicating that these firms are able to time the market in share repurchasing. Novelty – Despite numerous previous studies focusing solely on using share repurchases announcement for computing cumulative abnormal returns in testing managerial market timing, this study contributes to the literature in several ways: (i) providing evidence relating stock price informativeness and performance of market-timing in share repurchases; (ii) developing a better timing measure constructed using actual repurchasing data; (iii) adopting a cost saving measure as the timing measure instead of cumulative abnormal return. Type of Paper - Empirical. Keywords: Managerial Learning Hypothesis; Market Timing; Stock Repurchase; Stock Price Informativeness; Firm-specific Stock Return Variation. JEL Classification: G12, G13, G14. DOI: https://doi.org/10.35609/jfbr.2019.4.1(5)
{"title":"Effect of Stock Price Information on Timing of Share Repurchases","authors":"C. Chee, N. H. A. Razak","doi":"10.35609/jfbr.2019.4.1(5)","DOIUrl":"https://doi.org/10.35609/jfbr.2019.4.1(5)","url":null,"abstract":"Objective - This study investigates whether private information newly incorporated into stock price enhances performance in timing share repurchases.\u0000\u0000Methodology/Technique - Cost saving gained in share repurchases is used a proxy for performance of market-timing in share repurchases and firm-specific stock return variation is used to gauge stock price informativeness. A sample of 334 U.S. repurchasing firms are tested using panel data regression.\u0000\u0000Findings - The paper concludes that managers possess better market timing skill by obtaining more cost saving from their share repurchases when private information is reflected in stock price. Stock price informativeness may be the tool for managers to improve their market timing skill to take advantage of the stock market. Furthermore, firms with smaller size and a higher market-to-book ratios, and firms with higher cash-to-assets ratios are found to achieve more cost saving in buying back their shares indicating that these firms are able to time the market in share repurchasing.\u0000\u0000Novelty – Despite numerous previous studies focusing solely on using share repurchases announcement for computing cumulative abnormal returns in testing managerial market timing, this study contributes to the literature in several ways: (i) providing evidence relating stock price informativeness and performance of market-timing in share repurchases; (ii) developing a better timing measure constructed using actual repurchasing data; (iii) adopting a cost saving measure as the timing measure instead of cumulative abnormal return.\u0000\u0000Type of Paper - Empirical.\u0000\u0000Keywords: Managerial Learning Hypothesis; Market Timing; Stock Repurchase; Stock Price Informativeness; Firm-specific Stock Return Variation.\u0000\u0000JEL Classification: G12, G13, G14.\u0000\u0000DOI: https://doi.org/10.35609/jfbr.2019.4.1(5)","PeriodicalId":250716,"journal":{"name":"Journal of Finance and Banking Review Vol. 4 (1) Jan-Mar 2019","volume":"230 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132141617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-03-19DOI: 10.35609/jfbr.2019.4.1(2)
Lis Sintha
Objective - The purpose of this study is to examine the influence of capital on bankruptcy banks. The hypothesis of this research is that capital has an effect on the bankruptcy of a bank. Methodology/Technique - This research examines financial reports between 2005-2014. An econometric model with a logistical regression analysis technique is used. In this study, capital is measured by CAR, taking into account credit risk; CAR by taking into account market risk; Ratio of Obligation to Provide Minimum Capital for Credit Risk and Operational Risk; Ratio of Minimum Capital Adequacy Ratio for Credit Risk, Operational Risk and Market Risk; Capital Adequacy Requirements (CAR). Findings - The results show that the capital adequacy ratio for market ratio and capital adequacy ratio for credit ratio and operational ratio support the research hypothesis and can form a logit model. The test results of CAR by taking into account credit risk, Minimum Capital Requirement Ratio for Credit Risk, Operational Risk and Market Risk and Minimum Capital Provision Obligations do not support the research hypothesis. Novelty – This paper contribute to bank bankruptcy prediction models based on time dimension and bank groups using financial ratios which are expected can influence bank in bankrupt condition. Type of Paper - Empirical. Keywords: Banking crisis, Cost of bankruptcy, Adequacy Ratio, Financial ratios, Prediction models JEL Classification: G32, G33, G39. DOI: https://doi.org/10.35609/jfbr.2019.4.1(2)
{"title":"Bankruptcy Prediction Model of Banks in Indonesia Based on Capital Adequacy Ratio","authors":"Lis Sintha","doi":"10.35609/jfbr.2019.4.1(2)","DOIUrl":"https://doi.org/10.35609/jfbr.2019.4.1(2)","url":null,"abstract":"Objective - The purpose of this study is to examine the influence of capital on bankruptcy banks. The hypothesis of this research is that capital has an effect on the bankruptcy of a bank.\u0000\u0000Methodology/Technique - This research examines financial reports between 2005-2014. An econometric model with a logistical regression analysis technique is used. In this study, capital is measured by CAR, taking into account credit risk; CAR by taking into account market risk; Ratio of Obligation to Provide Minimum Capital for Credit Risk and Operational Risk; Ratio of Minimum Capital Adequacy Ratio for Credit Risk, Operational Risk and Market Risk; Capital Adequacy Requirements (CAR).\u0000\u0000Findings - The results show that the capital adequacy ratio for market ratio and capital adequacy ratio for credit ratio and operational ratio support the research hypothesis and can form a logit model. The test results of CAR by taking into account credit risk, Minimum Capital Requirement Ratio for Credit Risk, Operational Risk and Market Risk and Minimum Capital Provision Obligations do not support the research hypothesis.\u0000\u0000Novelty – This paper contribute to bank bankruptcy prediction models based on time dimension and bank groups using financial ratios which are expected can influence bank in bankrupt condition.\u0000\u0000Type of Paper - Empirical.\u0000\u0000Keywords: Banking crisis, Cost of bankruptcy, Adequacy Ratio, Financial ratios, Prediction models\u0000\u0000JEL Classification: G32, G33, G39.\u0000\u0000DOI: https://doi.org/10.35609/jfbr.2019.4.1(2)","PeriodicalId":250716,"journal":{"name":"Journal of Finance and Banking Review Vol. 4 (1) Jan-Mar 2019","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126482606","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-03-16DOI: 10.35609/jfbr.2019.4.1(1)
Yulius Kurnia Susanto
Objective - Income smoothing is a form of earnings manipulation to show that the company's performance is good. Income smoothing can be detrimental to investors, because investors do not know the real financial position and fluctuations of the company. Management of the company engage in income smoothing because investors tend to focus only on the amount of profit reported without regard to the process of generating profits. The purpose of this research is to obtain empirical evidence about the effect of firm value and size on income smoothing. Methodology/Technique - The sample of the research includes manufacturing companies listed on the Indonesian Stock Exchange from 2014-2016. The samples were determined using a purposive sampling method and there are 51 companies that meet the criteria used. This research uses a logistic regression method for data analysis. Findings - The results of the research show that the effect of firm value on income smoothing is positive and significant. Meanwhile, the effect of firm size on income smoothing is negative and significant. Companies that create value in the eyes of investors will try to retain their investors by engaging in income smoothing. Income smoothing will convince investors to invest in the company. Meanwhile, large companies that are convinced that investors will continue to invest do not typically engage in income smoothing. Novelty – This study proves that, in the context of agency theory, the principal's desires are not often aligned with the wishes of management which can give rise to agency costs, one of which occurs as a result of income smoothing. Further, firm size can minimize opportunist income smoothing actions. Type of Paper - Empirical. Keywords: Income Smoothing; Firm Value; Firm Size; Agency Theory. JEL Classification: G32, M41, M49. DOI: https://doi.org/10.35609/jfbr.2019.4.1(1)
{"title":"Firm Value, Firm Size and Income Smoothing","authors":"Yulius Kurnia Susanto","doi":"10.35609/jfbr.2019.4.1(1)","DOIUrl":"https://doi.org/10.35609/jfbr.2019.4.1(1)","url":null,"abstract":"Objective - Income smoothing is a form of earnings manipulation to show that the company's performance is good. Income smoothing can be detrimental to investors, because investors do not know the real financial position and fluctuations of the company. Management of the company engage in income smoothing because investors tend to focus only on the amount of profit reported without regard to the process of generating profits. The purpose of this research is to obtain empirical evidence about the effect of firm value and size on income smoothing.\u0000\u0000Methodology/Technique - The sample of the research includes manufacturing companies listed on the Indonesian Stock Exchange from 2014-2016. The samples were determined using a purposive sampling method and there are 51 companies that meet the criteria used. This research uses a logistic regression method for data analysis.\u0000\u0000Findings - The results of the research show that the effect of firm value on income smoothing is positive and significant. Meanwhile, the effect of firm size on income smoothing is negative and significant. Companies that create value in the eyes of investors will try to retain their investors by engaging in income smoothing. Income smoothing will convince investors to invest in the company. Meanwhile, large companies that are convinced that investors will continue to invest do not typically engage in income smoothing.\u0000\u0000Novelty – This study proves that, in the context of agency theory, the principal's desires are not often aligned with the wishes of management which can give rise to agency costs, one of which occurs as a result of income smoothing. Further, firm size can minimize opportunist income smoothing actions.\u0000\u0000Type of Paper - Empirical.\u0000\u0000Keywords: Income Smoothing; Firm Value; Firm Size; Agency Theory.\u0000\u0000JEL Classification: G32, M41, M49.\u0000\u0000DOI: https://doi.org/10.35609/jfbr.2019.4.1(1)","PeriodicalId":250716,"journal":{"name":"Journal of Finance and Banking Review Vol. 4 (1) Jan-Mar 2019","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123003129","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：