Analysis Of Motivation And Effectof Corporate Share Repurchase

In August 2015,China Securities Regulatory Commission and other four ministries and commissions jointly issued the notice on encouraging the merger and reorganization of listed companies,cash dividend and share buyback.The operation mode of share buyback has been further supported,which can more effectively enhance the company's value.On November 9,2018,the four ministries and commissions jointly issued the opinions on supporting listed companies to repurchase shares,which further regulated the specific implementation process of share repurchase of listed companies.In recent years,with the further development of China's capital market,more and more companies begin to implement the strategy of share buyback,and the theory of share buyback in China is becoming more and more perfect,so it is of great significance to study the motivation and subsequent impact of share buyback at this stage.Due to the huge amount of shares repurchased by Midea in 2018 and the rapid repurchases,this paper analyzes the repurchases of Midea.Based on the theory of financial effect,signaling theory and principal-agent theory,it uses a series of research methods such as event study and factor analysis to analyze the motives and repurchases of Midea After that,the positive and negative effects are produced,and the corresponding conclusions are drawn.This paper is divided into six parts: the first chapter is the introduction.Firstly,it introduces the background and significance of share repurchase.Secondly,from the three aspects of share repurchase motivation,market effect and financial effect,this paper summarizes the views of scholars at home and abroad to lay the foundation for the following contents.Finally,it lists the research methods,research contents and innovation points of this paper.The second chapter is the concept definition and theoretical basis.This chapter defines the relevant concepts of share buyback,and sorts out the theories of share buyback,which lays a theoretical foundation for the following case study.The third chapter is the specific introduction of this share buyback case of Midea.It mainly analyzes the development status of China's home appliance industry,the position of Midea in it,and the specific process and final results of Midea's buyback.The fourth chapter makes a concrete analysis on the different motives of American company's share buyback.The fifth chapter analyzes the market effect and financial effect of the buyback of Midea Company in detail,mainly using the event study method to analyze the stock price and excess return rate of Midea Company,and using the factor analysis method to analyze the financial effect of Midea Company in detail.The sixth chapter is the conclusion and Enlightenment of Midea's share buyback.Through the case study of Midea's share buyback,this paper provides reference and experience for other listed companies whether they need share buyback.