Research On The Intermediary Effect Of Market Reaction On Stock Undervaluation And True And False Repurchase

Stock repurchase refers to the behavior of a listed company to repurchase its issued stocks on capital market by using its own funds or debt.Stock repurchase is an important tool in the capital market to transmit the undervalued signal of the company’s share price.However,many listed companies abuse it by issuing the announcement of stock repurchase plan without actual repurchase behavior.Or the amount of share they repurchase is far less than what they promised.This kind of repurchase behavior is called false repurchase.False repurchase violates market fairness and indicates corporate dishonesty,which is not conducive to the healthy development of China’s capital market,and even harms the interests of small and medium-sized shareholders.Documents at home and abroad have shown that the degree of stock undervaluation will affect true and false repurchase,as well as the market reaction.Based on this,this paper argues that the degree of stock undervaluation will further affect the true and false repurchase by influencing the market reaction.Market reaction plays a mediating role in this process.This paper chooses stock repurchase data of A-share listed companies in China from 2012 to 2017.The relative stock valuation method is used to calculate the degree of stock undervaluation;the event study method is used to calculate the market reaction of stock repurchase;the descriptive statistics method is used to calculate the actual stock repurchase ratio,that is,the substitute variable of true and false repurchase.through multiple regression analysis,verifying that there is a significant correlation between stock undervaluation and the true and false repurchase,as well as market reaction;.And this paper uses through the test method of intermediary effect,verifying that market reaction plays partial intermediary effect in the process of stock undervaluation affecting the true and false repurchase.Finally,this paper gives conclusion,and provides referential suggestions from the perspective of the listed companies,investors and capital market regulators.At the same time,this paper points out prospects for future research.