Research On The Market Effect Of K Company Share Repurchase

In recent years,with the development of China’s capital market and the continuous improvement of relevant policies and regulations,stock repurchase has gradually become a common capital operation mode for listed companies.In October 2018,the Sixth Session of the Standing Committee of the 13 th National People’s Congress deliberated and approved the special amendments to the company’s stock repurchase regulations.This revision not only enriched the use of stock repurchase,but also simplified stock returns.Purchase decision-making process.Within three days from the implementation date,more than 60 listed companies have issued repurchase announcements,and the repurchase scale will exceed 10 billion.Therefore,stock repurchase is a means to effectively improve the company’s stock price,and it is of great significance to study its market effect.In this context,this paper firstly combines the literature research method and theoretical induction method to understand the development status of stock repurchase.Then,this article uses the K company’s stock repurchase case as the research basis and introduces the event research method to test the company’s stock repurchase Market effects.First,this article uses a market model to calculate the excess return rate.At the same time,in combination with OLS regression analysis,the parameters of the model are obtained by using the estimated period data.From the calculated excess return rate and cumulative excess return rate of the K company’s stock in the window period,However,the company’s stock repurchase has produced a positive and positive market effect after the announcement date.Although the stock price can be increased rapidly,the market effect is short-term and not lasting.Therefore,based on the theoretical basis of the market effect of stock repurchases,this article further analyzes the causes of this market effect.Finally,it is concluded that the stock repurchase can indeed enhance the stock price and investor confidence.However,it cannot be ignored that this stock repurchase has not been effectively used,it can only produce short-term market effects,and there are also certain information leakage problems.Therefore,in view of the related problems in the company’s stock repurchase,this article recommends that listed companies should not blindly pursue the improvement of stock price when conducting share repurchase,but should consider their actual situation comprehensively,choose a reasonable repurchase timing,and actively To cope with the negative effects brought by stock repurchase,timely disclose information related to stock repurchase.