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ABANDONMENT VALUE AND CAPITAL BUDGETING: COMMENT
Free Markets, Finance, Ethics, and Law.
1. A Framework for Ethical Decision Making. 2. Diagnosing and Treating Market Inadequacies. 3. The Legal System, Product Liability and the Creative Use of Bankruptcy. 4. Environmental Issues and the Law of Damages. 5. Fraud, Legal and Financial Agency, Ethics and the Fiduciary Relationship. 6. Regulation: With an Emphasis on Financial Markets. 7. Regulating Financial Markets: Commercial Banking. 8. Regulating Financial Markets: Investment Banking, Securities Markets and Money Management. 9. Corporate Power and Social Responsibility and the Issue of Antitrust. Index.
Management of Bank Portfolios.
Errors in estimating share repurchases
We examine the accuracy of various estimates of firms' repurchases of common stock used in earlier studies, and find high error rates in the most commonly used estimators. We also find that the procedure used to estimate open market share repurchases can significantly impact results. The Compustat-based measure, which is the most accurate, deviates from the actual number of shares repurchased by more than 30% in about 16% of the cases. We conclude that many studies should be revisited now that the SEC mandates disclosure of precise information about share repurchases in Forms 10-Q and 10-K.