Sodhi, Adhiraj ORCID: 0000-0002-5689-933X and Stojanovic, Aleksandar (2024) Deregulating the volume limit on share repurchases. International Journal of Financial Studies, 12 (3):89. pp. 1-22. ISSN 2227-7072 (Online) (doi:https://doi.org/10.3390/ijfs12030089)

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Abstract

We empirically advocate for UK regulators to increase the volume limit of 15% outstanding shares on open market repurchases. Our main framework initially tests the determinants of share repurchases based on their size, Small, Medium and Large. The findings reveal that consistent with extant literature, the payout is primarily determined by its capability of distributing excess cash to shareholders and signaling undervaluation. We then check the viability of increasing the volume limit by testing new levels at 2.50% increments, up to 30%. The results indicate that any increase does not broadly change the determinants’ relationship with the payout, rather increased efficiency is realized at every interval, with the 20% and 30% levels being the most favorable.

Item Type:	Article
Additional Information:	This article belongs to the Special Issue Corporate Finance 2.0.
Uncontrolled Keywords:	repurchases; volume; deregulation
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HF Commerce H Social Sciences > HF Commerce > HF5601 Accounting
Faculty / School / Research Centre / Research Group:	Greenwich Business School Greenwich Business School > School of Accounting, Finance and Economics
Last Modified:	09 Sep 2024 15:53
URI:	http://gala.gre.ac.uk/id/eprint/47851

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