Research On Treasury Stock System Of The Listed Company From The Financial Perspective

The treasury stock system of the listed company are about the acquirement and usage of treasury stocks. Treasury stock system has been implemented for many years in the United States, Britain, Germany, Japan and other countries. And it has played a positive role in the stability of the capital market and the improvement of the company's financial position. Treasury stock was previously not allowed to exist in our country before 2005. But "Company Law" of our country was significantly changed in 2005, it requires that the listed company can repurchase stocks to meet the objections of employee stock ownership plan and the withdrawal of the dissenting shareholders and hold the repurchase shares for a certain period. So the existence of the treasury stock is actually recognized. This transformation of the legal policy gives us many fresh subjects to study up on. These subjects include the acquirement and usage of treasury stocks.In this paper, firstly it presents the definition of treasury stock and its legal characters different from the common stocks and gives a brief description of the development process of the treasury stock system from the perspective of domestic and foreign. Then it introduces several important hypotheses which the establishment and development of the treasury stock are based on and shows some risks brought with treasury stock at the same time. Treasury stock is just like a "reservoir", and it adjust the capital market and the company's financial position from two ways by share repurchase and usage of treasury stocks. So the main part of this paper divides the treasury stock system into two stages which are share repurchase and the stage after share repurchase and then have a detailed analysis and research on financial decision making and financial effects from the financial perspective. Finally the paper analyzes the system of treasury stock in china and puts forward some suggestions.