The Research On Repurchase Announcements Of Open-Market Stock

Stock repurchase is that a corporation buys its outstanding shares back for financing at a fixation price. The firms can logout the shares or hold them as the treasury stock after repurchase. But these shares can't participate in calculation return per share and distribution proceeds.Stock repurchases have become an important financial policy for listing firms over the last 20 years. It can mend the undervalued phenomenon of the investing value of the listing firms. When the market undervalues the stock of a firm badly, it may transfer the wrong signal to people; therefore the firms should take measures to resolve this problem. Stock repurchase implies that the firms are dissatisfied with the downtum of stock price, and can it turn this phenomenon for some extent. Once they repurchase, the net returns per share of company, the competence of payoff, and the other financing index will be raised, and the invest value will be raised as well. There are primarily three common forms of share repurchase: Dutch auctions, Fixed-price tender offers and Open-market repurchase. We will chiefly analyze the open-market repurchase which is the most popular form for repurchase.Due to the open-market repurchase are applied extensively at domestic and international, the theories of repurchase announcements gradually become the financial hotspot. This paper mainly makes research for the theory of the repurchase using the mathematics knowledge. Chapter 1 concludes some problems which are raised from the repurchase theory and introduces some different views and development circs at home and abroad at present. Chapter 2 mainly explains that why firms do announcements on open-market repurchase programs. We haves discussed the returns basing on the two models: single-firm-type version of the model and a signaling (two-type) mode, and induce good firms announce the repurchase programs. Chapter 3 concludes that good firms are apt to announce the repurchase programs and bad firms are inclined to keep silence according to various aspects based on the...