Download now Free registration required
In this paper, the author will examine if low transparency firms are more successful in repurchasing undervalued stock and earn higher market-timing profits than high transparency firms. Low transparency firms have more information asymmetry problems (Diamond and Verrechia (1991)), while information asymmetry can make stock valuation of low transparency firms more difficult. Therefore, the stock price of low transparency firms is more likely to be mispriced while the magnitude of mispricing of low transparency firms will be larger than that of high transparency firms.
- Format: PDF
- Size: 495.1 KB