| Share repurchase plays an important role in stabilizing stock price,maintaining fair market value,and possessing reasonable proportion of equity and debt.China’s share repurchase policies are constantly being updated to adapt to changes in the macro environment.After the revision of China’s “Company Law” in 2018,the improvement of share repurchase policies encourage the rational use of share repurchase.This change has also set off a wave of share repurchases in 2018.This article first elaborates the concept and method of share repurchase,using the literature research method to comb theories of share repurchase,including the analysis of the motivation and the effect of share repurchase.Then the article introduces the two share repurchases process separately,explored the motivations for its share repurchase and the effects of the share repurchase,and then analyzed the commonalities and differences of the two share repurchases.Based on the above analysis,relevant enlightenment and suggestions are obtained: At the corporate level,the timing and motivation of share repurchase will have impact on the effect,and listed companies should grasp the right time of share repurchase.In addition,share repurchase can optimize the company’s capital structure,adjust the company’s operating performance,and have a positive impact on shareholder wealth,but this impact of share repurchase is transient;at the policy level,more reference should be made to foreign mature capital market,promote the systematic construction of share repurchase,establish a treasury stock system,and maximize the positive effects of share repurchase;at the regulatory level,China should further improve information disclosure and corresponding regulatory systems of the national securities market to protect interests of small and medium investors. |
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