Research On The Motivation And Economic Consequences Of Stock Repurchase Of Listed Companies

Influenced by the international financial market,the performance of China’s securities market is not optimistic.As a means of capital operation of listed companies,stock repurchase has been favored by enterprise managers in recent years,and stock repurchase has gradually become an effective way to improve the current situation of enterprises.In addition,due to the late start of China’s stock repurchase market,the research on stock repurchase needs to be improved.Therefore,the study of listed public stock repurchase cases has great theoretical and practical significance.This paper selects the stock repurchase time of Chenguang biological in 2019 as the object of case study,and studies the motivation and economic consequences of Chenguang biological repurchase event by using case analysis method,event research method,factor analysis method,EVA index method and other research methods.This paper is divided into six parts.The first part introduces the research background,research significance and research results of stock repurchase,and expounds the research ideas and research methods of this paper.The second part is the theoretical basis of this paper,which mainly summarizes the relevant theories of stock repurchase.The third part is the case introduction,which mainly introduces the general situation of the case company,the repurchase background and the repurchase process.The fourth part is to explore the motivation of stock repurchase in combination with the situation of the case company.It is found that there are four reasons for Chenguang biological Stock Repurchase: first,improve the company’s share price and earnings per share,second,replace cash dividends for dividends,third,adjust financial leverage and optimize the company’s capital structure,and fourth,reduce free cash flow and reduce agency costs.The fifth part starts with the market effect and financial effect of stock repurchase,and studies the economic consequences of the motivation of stock repurchase of the case company.From the perspective of market effect,Chenguang biological stock repurchase can bring short-term market effect to the company.From the perspective of financial effect,this paper believes that Chenguang biological stock repurchase increases the wealth of shareholders and improves the profitability,operation ability and growth ability of the company,but it will reduce the solvency of the enterprise.In addition,through stock repurchase,Chenguang biology has reduced the capital cost rate of the enterprise,optimized the capital structure of the company,reduced the free cash flow of the company,reduced the agency cost and improved the value of the company.The sixth part is the conclusion and enlightenment.Through the previous research,this paper draws the following three conclusions: first,the repurchase behavior is conducive to adjusting the company’s financial leverage and optimizing the capital structure;second,the stock repurchase can obtain a positive market response;third,the financial effect of the company’s implementation of stock repurchase is limited.Based on this,this paper draws the following three enlightenment: one is to treat stock repurchase rationally,the other is to reasonably plan the scale of stock repurchase,and the third is to ensure the information security before repurchase and protect the rights and interests of minority shareholders.