Study On Share Repurchase Effect In China Listed Companies

Share repurchase means that listed companies use accumulated fundsor debt financing to buy back common stock they have already issued andtake it as treasury stock or cancel it in order to reduce capital or adjust theequity structure. In early2008, the China Securities RegulatoryCommission released the Management Measures of Repurchase of SocialPublic Shares by Listed Companies (trial), thus opened the door forlisted companies to repurchase outstanding shares.With the development of market economy, listed companiesincreasingly realized the benefits of share repurchase and attempted torepurchase share. Therefore, in-depth study and exploration of thetheoretical and practical problems about share repurchase have positivesignificance for promoting the innovation and development of China’scapital market, solving the problem of enterprise value undervalued andsame shares with different prices.By the method of case study, this paper selected two listedcompanies Baosteel and Luthai to do a comprehensive analysis of theeffect of share repurchase by listed companies in China, and comparedthe different effects of share repurchase applied in A share market and Bshare market in China. Then this paper found the common problems ofshare repurchase in China and put forward suggestions.This paper is divided into four chapters. Chapter one elaborated the background and significance of choosing this topic, determined researchmethods and contents. Chapter two introduced the theoretical basis ofshare repurchase and relevant regulations in China. Chapter threeintroduced two cases, anticipated the influence of share repurchase byusing the relevant theories, then drew conclusions by comparing theimplementation and final effect of the two cases. Chapter four anticipatedthe developmental prospects of share repurchase in China and putforward corresponding policies and measures.There are still many problems while listed companies in Chinarepurchase share. To better use share repurchase as a financial means, weneed a more in-depth understanding of the present situation of sharerepurchase in China, combined with the experience of share repurchase ofspecific cases, explore a set of suitable ways of share repurchase for listedcompanies in China so as to guide them to better use the financial meansto improve the capital structure and maximize the interests ofshareholders.