THE EFFECTS OF EARNINGS ON SHARE REPURCHASE: EVIDENCE IN MALAYSIA
2020
The aim of this study is to investigate the influence of earnings on share repurchase for firms listed
in Bursa Malaysia. The dependent variable in this study is share repurchase while dividend per share,
earning per share, and operating income are the proxies to earnings representing the independent
variables. The analysis uses data from the time series for the period of 2014 to 2018 on an annual
basis. The information is gathered using secondary data gathered from the Bursa Malaysia Terminal
and accessed through the data stream. The results of this study revealed that earning per share and
operating income have a significant positive effect on share repurchase. In other words, earning per
share reduces the number of outstanding shares in the market while operating income encourages
excess income to be spent for share repurchase activity. On the other hand, the dividend per share
has an inverse impact on the share repurchase. The findings of this study not only benefit the body
of knowledge and current literature but also act as a useful tool for the management and key
stakeholders to influence their decisions in conducting share repurchase activity in Malaysia.
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