The Effects of Earnings on Share Repurchase: Evidence in Malaysia

Nazaria, Md.Aris and Mohammad Aidid, Aidi and Mohamad, Jais and Razman, Anuar (2021) The Effects of Earnings on Share Repurchase: Evidence in Malaysia. INTERNATIONAL JOURNAL OF ACADEMIC RESEARCH IN ACCOUNTING, FINANCE AND MANAGEMENT SCIENCES, 10 (4). pp. 22-39. ISSN 2225-8329

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Abstract

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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