Dr. Hamid Rahman Published in Managerial Finance
Recently, Alliant San Diego finance professor Dr. Hamid Rahman had his paper “Aborted Stock Repurchases and Earnings Quality” in the corporate finance journal Managerial Finance. Managerial Finance provides an international forum for the publication of high quality and topical research in finance, financial management, financial markets and institutions, international finance, banking, insurance and risk management, real estate and financial education.
Rahman’s paper is about how financial firms that abort announced stock repurchase programs are poorly understood. It hypothesizes that the long-term earnings quality of such firms is low, which makes them poor candidates for actual stock repurchase. The analysis in the paper shows that poor long-term earnings quality increases the chance of not carrying through on the repurchase announcement and limits the ability of non carry through firms to manage earnings downward prior to the repurchase announcement. Therefore, unlike firms that carry through their repurchase plans, there is no significant correlation between pre-purchase earnings quality and post-announcement period operating performance for these firms.
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