Capital Pricing Theory, Research, And Its Application In China

This paper focused on the introduction, comment and application of capital pricing theory. It consists of three parts. In the first part, I explanied the concepts, connotation and theory of capital pricing, and it' s advices on company management. In the second part, I did empirical research on the domestic capital market to find out the environment and application of capital pricing. In the third part, I give my suggestion and resolution on how to apply the capital pricing theory to domestic market.The first part is a comprehensive survey on capital pricing theory. Capital evolved from common commodity as the result of economic development, while relatively independent. So there are both common and different principles between the pricing of them. Capital pricing is both scientific and artistic, with the characteristics of relativity, timeliness, opaque and subjective, and is influenced by feedback effect and institutional defect. The process of capital pricing clearly shows what add to or reduce the company value, so capital pricing theory is also beneficial to value-oriented management. In many of investment theories about capital pricing, this paper chooses to introduce efficient market hypothesis, portfolio investment theory, MM theory, capital and asset pricing model, arbitrage pricing model, option pricing model, and behavior finance theory, each theory I will show you my understanding.The second part is empirical analysis. The most two important factors that influence the capital pricing is the market environment and investor' s behavior, so this paper analyzed the domestic capital market from these two aspects. For institutional defects and the uncertainty of its transferring, china capital market is transferring from weak form efficiency to semi-strong efficiency, so the investor who has advantages of gathering and processing information can beat...