Corporate Share Repurchases in the 1990s: What Role Do Stock Options Play?

  title={Corporate Share Repurchases in the 1990s: What Role Do Stock Options Play?},
  author={Scott J. Weisbenner},
  journal={Board of Governors of the Federal Reserve System Research Series},
  • Scott J. Weisbenner
  • Published 1 May 2000
  • Business, Economics
  • Board of Governors of the Federal Reserve System Research Series
This paper investigates how the growth of stock option programs has affected corporate payout policy. Given that earnings per share (EPS) is widely used in equity valuation, some corporations may opt to repurchase shares to avoid the dilution of EPS that results from past stock option grants. Executives may also prefer distributing cash by repurchasing shares or retaining more earnings, as opposed to increasing dividends, to enhance the value of their own stock options. This paper tests the… 

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