[雙語翻譯]--外文翻譯--保險公司公開市場股票回購公告及其信號（節(jié)選）

1、3100 單詞， 單詞，1.9 萬英文字符， 萬英文字符，5300 漢字 漢字出處： 出處：Huang G, Liano K, Manakyan H, et al. Open‐Market Stock Repurchases by Insurance Companies and Signaling[J]. Risk Management Miller and Shankar, 2005; Polonchek and Miller,

2、2005) that analyze share repurchases by insurance companies do not make a distinction between undervaluation signaling and the performance signaling in explaining the market reaction. A significant contribution of our

3、 article is to address this shortcoming by examining which of the two interpretations of the signaling hypothesis can better explain the market reaction to open-market share repurchase announcements by insurance compan

4、ies.Our article also contributes to the literature by focusing on repurchase programs an- nounced by insurance companies. Insurance firms provide an opportunity to learn more about the information conveyed in repurchas

5、e announcements. Unlike industrial com- panies, insurance companies are regulated and closely monitored by several agencies such as state and rating agencies. Insurance regulation encompasses several activities HYPOTHE

6、SES DEVELOPMENTThe market tends to react positively to a share repurchase announcement. Several hy- potheses have been proposed to explain the positive market reaction. These explanations include the signaling hypothes

7、is (Vermaelen, 1981), the free cash flow hypothesis (Jensen, 1986), the target leverage ratio hypothesis (Bagwell and Shoven, 1988), and the takeover defense hypothesis (Bagwell, 1991), among others. In this study, we

8、focus on the sig- naling hypothesis of open-market share repurchase programs announced by insurance companies.There are two interpretations for the signaling hypothesis. The first interpretation is the performance-sig

9、naling hypothesis. The performance-signaling hypothesis suggests that a stock could be fairly priced based on publicly available information, but is un- derpriced if private information is incorporated into the pricing

10、 process. According to this view, share repurchases are associated with positive announcement abnormal return because share repurchases are used as a means to convey management’s favor- able private information on the

11、 firm’s future prospects (Vermaelen, 1981; Miller and Rock, 1985). Focusing on short-term performance, Lie (2005) finds an improvement in quarterly operating performance for firms that actually repurchase shares.3 Howe

12、ver, Lie’s sample specifically excludes regulated firms. Massa et al. (2007) find that the stock price of other firms in the same industry decreases after the repurchase announcement made by a firm. Together, these fi

13、ndings suggest that the positive market reaction to a firm’s repurchase announcement implies an improved operating performance relative to the firm’s peers.Prior studies (e.g., Born et al., 2004; Miller and Shankar, 20

14、05; Polonchek and Miller, 2005) find that insurance firms yield positive abnormal returns in the announcement period. However, these prior studies do not examine whether future operating performance has improved. Thus

15、, whether insurers’ share repurchases convey positive information about future operating performance is an open question. In short, the performance-signaling explanation predicts:Hypothesis 1: Future operating performa

16、nce of insurance firms will improve following the re- purchase announcement.Hypothesis 2: There is a positive relation between future operating performance and the announcement-period abnormal return.In order to se

17、rve as a credible signal to the market, share repurchases are made by firms at some cost.4 It is expected that the cost of implementing a repurchase program is related to the size of the repurchase. Managers who are mo

18、re optimistic about their firm’s future prospects will plan to buy back more shares. Therefore, the performance-signaling hypothesis also has the following implication:Hypothesis 3: There is a positive relation between

19、 the size of a share repurchase program and future operating performance.The undervaluation-signaling explanation is another interpretation. The undervaluation-signaling explanation suggests that managers use share

20、 repurchases to signal that the stock of their firm is underpriced based on publicly available information (Oded, 2005). Consistent with Oded’s (2005) argument, Peyer and Vermaelen (2009) find that open-market share r

21、epurchases are responses from companies to the market overreaction to bad news prior to the announcement. The positive market reaction to the repurchase announcement is simply a market correction to its valuation of th