Research On The Motivation And Effect Of Stock Repurchase In A Company

China's stock repurchase started in 1992,and reached the repurchase climax after 2013,especially after the stock market crash in 2015,the quantity of stock repurchase of listed companies in China is increasing explosively.However,this round of share buyback from November 2017,especially since June 2018,ushered in a continuous peak.Because the implementation of stock repurchase is influenced by many factors,and the particularity of our stock market,it is necessary to study stock repurchase deeply.Based on the principal-agent theory and signal transmission theory,this paper mainly uses the case analysis method,selects the industry representative a company as the research object,takes a company's stock repurchase motivation as the cut-in point,carries on the detailed analysis to the stock repurchase this capital operation tool.Firstly,this paper analyzes the current situation of stock buyback in China through statistics of the number and motivation changes of Listed Companies in stock buyback over the years.Then it introduces the case of a company's stock buyback,first from the company profile,equity structure,operating conditions and other aspects of a company's profile,and then combs the relevant background and buyback process of the stock buyback.On this basis,the paper uses the financial comparison method,based on the relevant financial indicators and data,from market value management,free cash flow,capital structure and financial flexibility,etc.,to analyze and verify the motivation of a company's implementation of stock repurchase.It is found that the motivation of market value management and agency cost reduction is the most obvious.Thirdly,by studying the market effect and financial effect of stock repurchase on the company,it is found that while stock repurchase brings positive effects such as improving capital structure to the company,it will increase the payment risk of the company and infringe on the interests of small and medium shareholders,but it will not have a far-reaching impact on the company's value,whichfurther proves the motivation of stock repurchase of company A.Finally,on the basis of summarizing the experience and problems of this stock buyback,aiming at the negative effects brought by a company's stock buyback,this paper puts forward optimization suggestions from three dimensions: the listed company should correctly understand and reasonably use the stock buyback,optimize the sources of buyback funds,prevent the company's financial risks,strengthen the supervision of stock buyback,and protect the interests of small and medium-sized shareholders and creditors,so as to provide other suggestions The stock repurchase behavior of listed companies provides some reference.