Firms may repurchase shares to send true or false signals to the market. Since the mindset of managers is invisible, we measure it with earnings management. Discretionary accruals are used to proxy for earnings management. We show that earnings management is negatively related to the probability and frequency of share repurchase announcements. We also show that earnings management is negatively related to postannouncement 2-year operating performance and stock returns. Our findings support the prediction that the magnitude of earnings management can serve as a reliable indicator of managers' mindsets with regard to the valuation of firms.

中文翻译：

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股票回购和市场信号：来自盈余管理的证据

公司可能会回购股票以向市场发送真实或虚假的信号。由于管理者的心态是无形的，我们用盈余管理来衡量它。可自由支配的应计项目用于代理盈余管理。我们表明盈余管理与股票回购公告的概率和频率呈负相关。我们还表明，盈余管理与公告后 2 年的经营业绩和股票回报呈负相关。我们的研究结果支持这样的预测，即盈余管理的规模可以作为管理者对公司估值的心态的可靠指标。