Not So Smart: How Executives Spend Their Company’s Cash

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CFA Digest
May 2012 | Vol. 42 | No. 2 | 2 pages
Source: CFA Institute
Mark A. Harrison, CFA (Reviewer)

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Abstract

Recent evidence for S&P 500 Index companies seems to confirm studies that show that companies are bad at timing their share buybacks. Companies are also too optimistic about equity market returns for their pension plans. The result is that company executives are buying back stock when markets are high and underfunding their pension plans based on unrealistic forecasts of equity returns.

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Topics
Equity Investments
    :
  • Equity Market Valuation and Return Analysis
  • ·
  • Special Applications of Fundamental Analysis
|
Financial Statement Analysis
    :
  • Analysis of Pensions, Stock Compensation, and Other Employee Benefits
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