Research On The Influence Of Share Repurchase Of Midea Group On The Wealth Of Shareholders

Due to the undervalued stock repurchase refers to the enterprises,improve the capital structure,enhance investor confidence,the purpose of using their own money or financing to buy the stock of this enterprise,in order to reduce the behavior of the circulation of capital,research shows that stock repurchase behavior can be stable stock,promote enterprise's own value,is an important means of capital operation of listed companies.Stock repurchase originated in western capitalist countries,and with the development of the capital market,it has gradually been skillfully used by capitalist countries.Although China's capital market develops late and is not perfect,China's stock repurchase develops rapidly,which promotes the prosperity and development of China's capital market.The buyback of midea group selected in this paper is the largest conventional buyback completed in 2018,and the research on this buyback has certain representativeness.This article uses the literature analysis,case analysis and financial analysis of the research methods of combining with the "share repurchase" Angle,studies the reason of midea group stock repurchase and impact on shareholder wealth,in the understanding of midea group management situation,the basic financial position and capital structure,on the basis of the analysis of the effect of stock repurchase on shareholder wealth,as well as the stock repurchase motivations and influence on financial effect,analyzes the repurchase of shareholder wealth short-term and long-term effects,the results show that the midea group stock repurchase motivations are undervalued,in order to make the share price match with the value of the company,By calculating the group's weighted cost of capital,the buyback reduced the group's weighted cost of capital and optimized the capital structure.In view of this,this paper also puts forward the optimization strategy to improve the wealth of shareholders: to improve the understanding and rational use of stock repurchase;To set reasonable repurchase prices to protect the interests of minority shareholders and creditors;Good cash budget,reduce payment risk and financial risk;Improve information disclosure and avoid insider trading.This paper adopts the event study method to analyze the influence of the buyback of midea group on the wealth of shareholders.Different from the traditional single short-term analysis,it also analyzes the influence of the buyback on the wealth ofshareholders in the long term.It is hoped that the research in this paper can make a contribution to the research on the long-term and short-term effects of share repurchase on shareholder wealth of listed companies in China.