Motivation And Effect Analysis Of Stock Repurchase In Listed Companies

As a common capital operation mode and corporate finance behavior,stock repurchase is playing an increasingly important role in the capital market.In 2018,the state issued Opinions on Supporting Share Repurchase of Listed Companies,and the newly amended Company Law broke many restrictions on share repurchase.Listed companies responded to the policy one after another by launching buyback plans and actively implementing share repurchase to improve corporate governance.In recent years,Hengli Petrochemical has been leading the list of listed companies in terms of the amount of stock repurchase and the number of stock repurchase,which has caused certain influence in the market.Analyzing the whole process of stock repurchase has strong reference value for the study of the motivation and effect of stock repurchase.By reviewing domestic and foreign literature on stock repurchase,this paper summarizes the general motivation of listed companies to carry out stock repurchase.Then,based on the announcement of the plan,stock price changes and financial data of Hengli Petrochemical’s four stock repurchase processes from 2018 to 2022,this paper explores the motivation of Hengli Petrochemical’s four stock repurchases during this period.It is found that the main motivation is to maintain market value,equity incentive,improve the efficiency of capital use,optimize the capital structure,etc.In the stage of analysis of the effect of Hengli Petrochemical’s stock repurchase,after sorting out the content of effect analysis in relevant domestic and foreign literature,the market effect and financial effect before and after the stock repurchase are compared and analyzed.In the stage of market effect analysis,the event study method is used to calculate the excess rate of return and cumulative excess rate of return during the four stock repurchase event window,and judge the impact of the stock repurchase event on the market.In the stage of financial effect analysis,through the data analysis of Hengli Petrochemical’s solvency,profitability,operating capacity and growth capacity,the financial effect after four stock repurchases is obtained.Through the above analysis,the following conclusions are drawn: stock buyback of listed companies is affected by many factors;In addition to the motivation in the announcement,stock repurchase also has hidden motivation and diversity.Buybacks have both positive and negative effects;The effect of stock buyback of listed companies is shorter.And put forward relevant suggestions accordingly.Finally,this paper summarizes the full text and puts forward the shortcomings and prospects for the future.