Repurchase Price

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Repurchase Price

The price at which a seller (dealer) agrees to buy a security back from a purchaser (customer) on a designated future date. The repurchase price represents repayment of a collateralized short-term loan. See also: Repurchase agreement.
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So H is negative definite; [[PI].sup.C] is jointly concave with respect to [p.sup.C.sub.i], [p.sup.C.sub.3-i], [p.sup.C.sub.j], and [p.sup.C.sub.3-j]; thus, the optimal retailing and repurchase prices can be obtained by the first-order conditions as follows:
By combining (11), (12), (13), and (14) we can obtain the optimal retail prices [p.sup.*.sub.i] and [p.sup.*.sub.j], and optimal repurchase prices [p.sup.*.sub.Ri] and [p.sup.*.sub.Rj].
By assumptions 0 [less than or equal to] [gamma] < [beta] < 1 and 0 [less than or equal to] s < [beta] < 1, we can obtain that d[p.sup.CC.sub.j]/d[gamma] > 0; thus, the repurchase prices [p.sup.C.sub.Ri] and [p.sup.C.sub.Rj] are strictly increasing with respect to the recycling substitution effect.
By combining (22), (23), (24), and (25), we can obtain the optimal retail prices [p.sub.i] and [p.sub.j] and optimal repurchase prices [P.sub.Ri] and [p.sub.Rj].
And it follows from (19) that the repurchase prices [p.sub.Ri] and [p.sub.Rj] are decreasing with respect to the wholesale price w, while increasing with respect to the buy-back payment b.
Then we derive the optimal retail price, the optimal repurchase price, and the optimal profits of the manufacturer and the retailers.
Taking account of sharp decline in both shares, the repurchase prices could probably be higher than the market ones.
Banco Popolare has offered to buy the securities at a discount, with the repurchase prices varying between 43% and 91% of principal.
Their current prices are 10% and 6% below the repurchase prices, moreover, OGK-1 offers conversion gain of 3.8% (OGK-3 trades almost in line with conversion ratio).
The repurchase prices for those who vote against the deal are lower than current prices of Inter RAO, OGK-1 and OGK-3 by 5-13%, so repurchase claims are unlikely.
We draw attention to the fact that after a market decline share prices of OGK-1 and OGK-3 are only 4% and 2.3% higher than the repurchase prices, while Inter RAO current price is higher than its repurchase price by 10%.
To sum up, we note relatively fair conversion ratios for Inter RAO subsidiaries, but low repurchase prices. In current terms there is no alternative for OGK-1 and OGK-3 minorities other than to accept a swap.