Science and Education Publishing Journal of Finance and Accounting 2333-8857 3 2 2015 08 09 The Explanation Power of Investors' Opinion Divergence in Open Market Repurchases 18 36 EN Xiaochun Liu Department of Economics, Finance and Insurance & Risk Management, University of Central Arkansas, Conway AR, USA Hao Wang JFA2015322 10.12691/jfa-3-2-2 2015 07 22 2015 07 30 2015 08 09 This paper proposes a new theory to explain the behavior of share repurchases by assuming heterogeneity in investors' beliefs. This new theory provides testable hypotheses that are examined empirically in this paper. Our empirical results show strong evidence for the explanation power of investors' opinion divergence in firms repurchasing shares, even after considering controlling variables such as the undervaluation-signaling hypothesis. The results are also robust to various measures of investors' divergent opinions in open market repurchases.