An Empirical Study On Influencing Factor Of The Wealth Effect Of Share Repurchases

Share repurchase is the financial measure that listed company uses widely for the company's strategic development requirement of capital structure decision-making dividend policy and so on. The share repurchase of listed company can change its company's value, financial standing and shareholder wealth, make company and shareholders get considerable wealth effect.Share repurchase may optimize capital structure, the cost of debt financing is lower, because of strict market supervision and the rigidity of dividend policy, the cost of equity financing is higher. company which asset-liability ratio is lower repurchase its stocks and increases debt properly, is helpful for the effect of financial lever, reduce company's overall financing cost, so strengthen the anticipation of future company's profit ability, increase company's stock price. Through stock repurchase , may transmit positive signal to market to avoid its investment value of listed company have been underestimated long time in the market, take the effect on increasing enterprise value. And, share repurchase can reduce company's agency cost. After listed company buyback its stock, its asset-liability ratio goes up obviously, this will force creditor to add restrict term in debt contract, plays the part of the role of supervising management level and reaches the effect that increases enterprise value. In our country , stock repurchases may help listed company to reduce hold state-owned stock , big shareholder cover shows or adjusts , standard stock equity structure. Stock repurchases can increase company's value, at the same time, it also helpful to increase the wealth of company's shareholder. Western scholars as Vermaelen etc. made empirical research and shows that stock repurchases may not only make the people who sell stock get the 23% at a premium, and when purchases offer at term, share price will still higher to the former price before announcement about 13%-16%. It is said that empirical research shows stock repurchase will make company's stock price in a long-term increase, increase the wealth of company's shareholder and promotes the realization of enterprise financial goal. Since the cost of capital gains tax is lower than the tax for dividend bonus profit, through stock repurchase distribution dividend may help investor legal avoid tax, make shareholder get the effect of reduce tax burden.The wealth effect of stock repurchase is a objective existent fact. To make wealth effect biggest is important for listed company and shareholder. The focal point of domestic research about stock repurchase lies in the nature study , quantitative researches are comparatively less , and study parts are also less. Even if having some scholars carried out empirical research, but they mainly pay attention to what the information have be transmitted when listed company repurchase country corporative shares, or the stock repurchase influence company's finance, as well as the response by stock market of some share repurchase information etc., except influencing factor of the wealth effect of share repurchases.This paper use stock repurchase basic model, empirical study the influencing factor of the wealth effect of share repurchases of listed company in China, find out notable and favorable influencing factor, in order to help the listed company actual decision-making to repurchase stock, help the raising of listed company the level of capital operation , get greater straight wealth effect, at last realization goal of make shareholder wealth biggest.This paper divides 5 chapters totally to analyze:The first chapter is foreword, which introduce this paper mainly research background and value, related document summary ,research technique and major content and major innovation point.Chapter 2 is the general state of listed company stock repurchase, mainly introduce stock repurchase meaning and its motivation, theories of stock repurchase and model. This Chapter from different aspects analyze the motivations of companies repurchase stocks as well as the inner elements of create shareholder wealth by stock repurchase, have made theoretical prepare for the farther analyze of this paper;The discussion of Chapter 3 is the source and content of influencing factor of wealth effect of stock repurchase. First introduces wealth effect of stock repurchase, then analyze influencing factor of wealth effect. It offer variables for regression analysis.Chapter 4 is an empirical analysis which analyze influencing factors of the wealth effect of share repurchases of listed company in our country, after quantification filtrate influencing wealth effect factors, select suitable variable, carry out regression analysis with wealth effect be the explanation variable, find out①the most notable influences factor;②the favorable influencing factor of wealth effect;③the problem of seeks the biggest wealth effect should be notice, In order to make some useful suggestion to buyback stocks.Chapter 5, it is this paper studies conclusion and prospect, which summarized the research of this paper, at the same time make suggestions for listed company to biggest the wealth effect of stock repurchase. After study the limitation of this paper, at the end of chapter there are some prospect of stock repurchased research in the future.