A Study On The Motivation And Financial Performance Of Share Repurchase ——Take Company A As An Example

With the gradual development of Chinese capital market,the investment market activity of stock repurchase has received more attention in recent years.At present,share repurchase has been widely used in the capital of western countries.It can not only improve the financing structure of listed companies,but also a dividend distribution policy.Chinese securities market is still developing,but the corporate stock repurchase system has gradually received widespread attention from all walks of life.The share-trading reform in 2005 marked the entry of Chinese capital market into a period of full circulation.Subsequently,the Chinese government promulgated many market economic control regulations,which required listed companies to put forward some measures and methods to maintain the stability of corporate stock prices.,such as corporate share acquisition plans,employee stock ownership plans and corporate stock incentives.The implementation of stock repurchase plans by listed companies can not only maintain the corporate image and restore the trust of investors,but also prompt them to re-valuate the company’s stock price and convey a positive message for the future.Therefore,in-depth research on the market performance and financial effects of Chinese stock repurchase can help corporate management and regulators to more accurately understand the capital operation tool of stock repurchase,thereby promoting a more reasonable role of stock repurchase.Increase the company’s market value and maintain long-term stability in Chinese capital market.This article selects Company A as the research case company,namely Midea Group,because Midea’s fast operation and large amount of repurchase in 2018 are very representative.Taking Midea as an example,this paper studies the motivation and financial performance of share repurchase through event analysis and factor analysis on the basis of financial leverage theory,signaling theory,and free cash flow hypothesis.After analysis,the following points are obtained:（1）In terms of repurchase motivation: including stabilizing the stock price,reducing the company’s agency cost,adjusting the company’s financial leverage,and optimizing the company’s capital structure;（2）In terms of repurchase effect: reducing the company’s agency cost and increasing the stock price and short-term solvency;（3）there are negative effects: the long-term effect of stock price increase is not obvious,the capital structure change is not obvious,information leakage and financial risks increase;（4）Finally,based on the analysis of the entire repurchase,some points are put forward Feasible advice.The innovation of this paper is that through a comprehensive analysis of the market and financial effects of repurchase,it is concluded that there are advantages and disadvantages in repurchase.The repurchase has important reference value.