| Share repurchase refers to the act of a listed company repurchasing issued or circulated shares with certain procedures for the purpose of adjusting the capital structure and enhancing the value of the enterprise.This paper takes a listed pharmaceutical company that announced share repurchase from 2011 to 2018 as a sample,and studied the market reaction of share repurchase according to different repurchase motives.The empirical analysis found that there are significant differences in market effects based on different repurchase motives in the pharmaceutical industry.The factors that can generate positive cumulative extraordinary returns are mostly repurchase ratios.The representative Kunming and Jiuzhitang were selected as sample cases for analysis.It is found that the research hypothesis is also verified in individual cases and the market effect of improving stock price is better than the market effect of implementing equity incentive as motivation.Therefore,investors should be cautious,not only based on the motives of share repurchase announced by listed companies,but also should analyze the company’s repurchase ratio,major shareholder shareholding ratio and asset-liability ratio. |
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