Research On Stock Repurchase And Firm Value

Stock repurchase emerged in the 1980s and is an important tool for maintaining firm value.Compared with the West,the application and research of stock repurchase in China are less due to the serious stock splitting phenomenon and strict legislation rules in China.And now the scale of share repurchases has reached a historical climax.It has academic significance and Realistic meaning to make quantitative analysis of the effect of maintaining company value in the past wave of stock repurchase and give a summary of typical cases of market value management.The author hopes that through the research of this article,on the one hand,some conclusions can be drawn on the effect of Chinese stock repurchase in maintaining the firm value,and at the same time,it can provide some enlightenment for the relevant participants of share repurchase.The article uses a combination of quantitative analysis and case analysis to study the effect of Chinese stock repurchase on market value management.Then,judge the effectiveness of stock repurchase in Chine as a signal tool to announce that the firm value is underestimated.At the same time,the author uses case analysis to summarize the characteristics of the signal transmission mechanism of successful use of stock repurchase for market value management through whether the motivation has an economic foundation and whether the market response is effective.This article finds that the process of stock repurchase of listed companies in China has a strong periodicity in maintaining the value of the company.Usually,the effect is obvious after the important policy of stock repurchase is released.While there is no new policy after the policy is released for half a year,the stock repurchase no longer has the effect of market value management.The study also found that,in addition to its fundamentals and action events that can support the subsequent increase in the company’s market value,the stock repurchase company that successfully manages its market value will also have different market reactions when its historical performance is different.Finally,based on the above conclusions,the author gives some advice about to listed companies,investors and supervisory authorities in China.