Share Repurchase And Stockholders' Value Creation

Share repurchase is a common capital operating method in the western capital market, which is a way to reduce capital and adjust the equity structure of listed corporations through buying back its own stock. As a way of equity contraction, share repurchase involves capital structure and dividend policies of listed corporations, thus it can improve their internal stock value. With the economic reform deepened in our country, the excessive proportion of state-owned equity has become a large obstacle to further development of our stock market as well as making our listed corporate governance perfect, then state-owned stock lessening has become an important aim, under which state-owned economy quits from competitive fields in order to attain its strategic transfer. As a way of corporate restructuring, share repurchase has strategic value for our listed corporations. Therefore, studying related theories and practice on share repurchase of listed corporations has active meaning, which promotes the development and innovation of our capital market and listed corporations.In this thesis, five chapters are divided. In chapter one, the author introduces notions and classifications of share repurchase as well as current researches, and then gives the emphasis of the study. In chapter two, the author mainly describes the model and theoretical hypothesis on share repurchase, and explains motivations of share repurchase as well as internal mechanism of stockholders' value creation from different perspectives. In chapter three, the author discusses related influencing factors, timing, way, capital sources, pricing, and payment methods of share repurchase under legal environments of share repurchase in different countries, thus giving available schemes for our practices. In chapter four, the author analyses such problems as the real motivations, market impact, information disclosure of share repurchase through a case study on state-owned corporate share repurchase of the listed corporation "shenneng" in order to give some ideas for our practices. In chapter five, the author summaries some problems which desiderate solutions, and put forward some related suggestions for them.